But if they aren’t protected under copyright, then any asset flipper can use your main character - taking the model right from your AAA game - and throw it into their 99-cent asset flip scam, and you can’t do anything about it.

They could send a DMCA claim and Steam would probably just take it down right? Again, really hard to prove it was 100% AI, and in the case of a full usable 3d character model, with current technology it definitely was not. I guess what I mean by "why it matters" is, it doesn't seem like it would practically make any difference to how things will go or what will happen.

When it gets to be possible to just about fully autogenerate games, yeah then they might have a reason to wish they could have more copyright.

I believe Steam has the policy on AI that they do both because of public opinion about the use of AI (and the way it’s being used to steal from creators) and because AI generated games tend to fall into the same category of outright scams that NFT games do, and games containing NFTs are straight up banned from Steam.

Games using AI used to be banned from Steam, but they changed it to allow them. Requiring tags seems like a nice compromise.