It's the written equivalent of deepfake porn - hugely entertaining for the creators, not so much for the victims. Especially if they're teens at school, and the creators are bullying them.

No matter what AO3 thinks, in many countries this immediately crosses the line into criminal harassment.

As for the rest - the fanfic community has been among the loudest criticising AI writing for 'stealing from real artists', which is... not exactly self-aware.

What is not self-aware about criticising machines for stealing the work that you were previously doing?