Sidestepping the whole discussion about "fake" and "real" images, I think what matters is what degree of correlation is there, if any, between the raw sensor data and the final photo you show your friends.

Raw data requires interpretation, no argument there.

But when AI starts making stuff up out of nowhere, it becomes a problem. Again, some degree of making up stuff is ok, but AI often crosses the line. When it diverges enough from what was captured by the sensor, it crosses firmly into "made up" territory.