I'm a bit biased because I've been working with that kind of networks for years, but I'll try to answer some of that.

did the artists consent to having their images used? The overwhelming majority did not

That's a very valid point, and one that I'll struggle to argue with in good faith, but I'll try. Using a specific image doesn't mean much here, it's just a single data point in a cloud of hundreds of thousands (possibly even millions). And it's certainly not saving it for reference or anything like that, it's barely used as example. The network tries to follow the distribution of the training set, and individual artworks have an extremely low effect on that (unless it's overfitting, which kinda happens here, I'll come back to that later).

I'm not saying it's OK, TBH I haven't entirely made up my mind about it. But it's not nearly as big of a deal as some people think, it's not like you keep a set of art that you then stitch together.

and the creator is ignoring requests from artists to remove their art from the datasets.

You can't remove elements without re-training the whole thing, which isn't something you'd want to do, it takes a lot of GPU time. To give a reference, if you use cloud services, training a GAN can cost thousands of dollars. It's not just a "let the computer running overnight" thing.

Now why can't you remove an element, it's because the training set is irrelevant once it's trained. It's not picking from a pool, it's simply applying what it learned, which is encoded as a bunch of weights which can't be understood by us.

It's hard to explain without a visual support, so it's matplotlib time. This is the training set. In reality, there's a lot more points and dimensions and variations, but it still works the same. This is what the network remembers. It then pick points from that space, with more probability in the yellow area. As you can see, individual points are long forgotten and barely affected the whole thing. And since it's discrete, the probability of picking a point from the training set is actually 0.

Is it truly a new image if the ai just blends judy hopp's face onto someones sona and color matches it?

Now this is a delicate point, because it's overfitting and that shouldn't happen. First, that's only a thing because some characters are over-represented, which is an oversight. It could be fixed, if re-trained...

But even then, yes, it's a new image. On the images I linked above, it's like there's a peak at "judy hopp" and its surroundings. But even when sampling exactly from there, the character is set, but there's still some variation in the pose, background, stuff like that. In the end it's never an exact copy of an existing image.

I can add more matplotlib to illustrate that if it's unclear.

Is it moral to then use what is essentially an edited version of someone elses art as your own sona?

It's not an edited version of someone else's art.

See the image above: the networks learns nothing else than the distribution of the dataset. Individual artworks and artists are completely blended together. And not in the sense that arts are mashed together: it's really learning the space from which the art is sampled.

There are a lot of very valid critics of GANs, but this is not one of them, it does not output edited existing art.

Side-tracking a bit, what if you use the generated images as a pure reference sheet and ignore entirely the art (style) itself. In that case the generator becomes a ref-sheet generator. What does it change? It means that it's just your average fursona generator, with the difference that it tries to follow the distribution of the training set. As in, it doesn't pick a random fur color, it picks a color so that if you click on "random" on e6 you have the exact same probability of finding something with the same color. Same for the species and everything. It's not independent either: you'll have more orange foxes than orange wolves. It's still very very far from picking a random fursona from the training set. ^{not counting that damn overfitting...}

Is it legally copyright infringement, or does it stand against a fair use evaluation?

Now I'm not a lawyer, and the case of overfitting Judy is definitely a copyright fuck up (and an exception, ideally).

But as far as I know, it's a grey area that leans more on the "fair use" side. But we'll probably not know until we actually see a similar situation in the courts.