Wikipedia: In copyright law, a derivative work is an expressive creation that includes major copyrightable elements of a first, previously created original work.
I think you may be off a bit on what a derivative work is. I don't see LLMs spouting out major copyrightable elements of books. They can give a summary sure, but Cliff Notes would like to have a word if you think that's copyright infringement.
I would be, and I don't understand why you think this would be a problem. I wouldn't want the government to be preventing activities that there weren't any actual laws prohibiting.
You're missing the point. I'll make your example more specific.
Well when fraud/rape/murder happens we have laws. So no problems.
Those things happen. Creating a LLM based on copyrighted material without permission happens - it's not a hypothetical. But even then, giving a punishment after the fact does not make the initial crime "no problem", as you put it.