That's still automated in the same way that a compiler is automated. A compiler doesn't remove the copyright, neither does a decompiler. This isn't different enough to have different copyright rules. There are more layers to the transformation, but it's still a program with input and output.
I'm not sure what you mean by "navigation of latent space". It's generating a model from copyrighted input and then using that model and more input to generate output. It's a machine transformation in more steps.