>It doesn't seem to me as though the distinction between "Copilot reproduced the code and the engineer copy/pasted/saved it" versus "Copilot inserted the code" is crucial.
Is Google responsible when they index licensed code, then others steal it? It's surely the liability of the programmer to "check" (Not really sure how this would work, either).
>>sodali+(OP)
What matters is that users of Copilot (the "others" who "steal it" in your scenario) are liable for infringement. That renders Copilot impractical as a tool for production use, regardless of whether Microsoft has any liability.