No, they're absolutely correct, and they're not saying either of those things. They're pointing out an enormous hidden risk. Yanno, like an engineer is supposed to do.

You don't have a license because it's what all the cool kids are doing, you have one in case shit goes sideways and someone decides to try and ruin your day. You do, in fact, have to assume the worst.

The "nuke" here is some litigious company -- let's call them Patent Troll Rebranded (PTR) -- discovers that the LLM reproduced large amounts of their copyrighted code. Or it claims to have discovered it. They have large amounts of money and lawyers to fight it out in court and you are a relatively shoestring language foundation.

Either you have to unwind years of development to remove the offending code or you're spending six figures or more to defend yourself in court, all because you didn't bother to anticipate things that are anticipatable.