No, it just means that a bunch of lawyers are going to get rich. They will force judges to legislate exactly what amount of human input is necessary for a work to be copyrightable, and there will be endless lawsuits arguing whether particular pieces of work have enough human creativity in them. Big companies aren't going to let something like this stop them.

You can't use legal force to have a monopoly of distribution, thus you can't charge people at that point (as others can redistribute it). You can however do it patron style and get paid before production. Not as much money in it when you have less control but I think that's better than artifically making the digital work scarce in the age where copying is easy.

It can be... But others can monetize it too

Not necessarily. I recall one of the big issues was an animation studio using AI generated backdrops, but still drawing the critical elements in the scenes. So you need something convincingly "foresty" in the background but don't care about the details, you start there, and then maybe carve out some path for the characters to be in and do the actual specific work there.

If the studio found out that people could freely rip off their backgrounds, I doubt they would care. There's a lot of "don't care" creative work that has to be done to fill out the context around actual core creative works. Also lots of room for, say, one 3D model to be created and using some AI-enhanced version of "palette-swapping" to create diversity in mobs without actually doing work. The derivation may not receive additional copyright protection, but the base model that was altered would be covered, so attempts to rip-off the AI mutated model would still hit the base model's protections. Even in constructing creative works that matter, you get to a basic design and then have AI take it away (coloring, rigging, animation might be AI enhanced beyond automation tools can provide already).