I wonder if there is a "loaded" lawsuit here that could be a win-win for license enforcement case law in LLMs.

Take a litigious company like Nintendo. If one was to train an LLM on their works and the LLM produces an emulator, that would force a lawsuit.

If Nintendo wins, then LLMs are stealing. If Nintendo loses, then we can decompile everything.

You're forgetting the option where the LLM companies pay Nintendo a silly amount of money for permission and Nintendo's executives take that as a win