How does anyone justify this? How can you argue this in good faith?

Snarky answer: “It is difficult to get a man to understand something, when his salary depends on his not understanding it.”

Realer answer: A combination of the above, plus group/bubble effect of all your coworkers saying the same thing. You as a group, conflate a bunch of concerns together (China, no-guardrails-AI, etc), decide that your group will be the responsible stewards of AI, and then anybody "stealing your work" appears dangerous - both to your livelihood and to the human race.