Then we should be focused on policing the usage of the model, not the training of it.

That's the point at which infringement occurs in your example. It's not the memorizing that's the infringement, it's the reproduction from your memory.

We shouldn't be regulating your hippocampus encoding the book, but your reproducing the book from that encoding.

Similarly, we shouldn't be regulating the encoding of material into the NN, but the NN spitting back out the material.