As far as I'm following it, the court didn't suggest the prompt was not a protected work.

But what the court did say is that the logo wasn't (sufficiently) derived from the prompt; those 300 words weren't contained or encoded in the logo, so if you copied the logo without permission from the author of the prompt, this was fine, because you weren't in any meaningful sense copying that prompt, or any other protected work of the author. (Which in my view is fair enough, really!)

Another way of thinking about it is to consider:

1) The number of different prompts that would yield a very similar looking logo. In many cases, a one or two word difference would probably yield a very different logo. (Conversely, you could rewrite an entire chapter of the novel, but the other chapters would still be translated more-or-less unchanged. You'd need to rewrite every sentence to end up with an entirely new set of sentences in the output, and since copyright covers the arrangement of text, not the plot or ideas, that matters.)

2) How feasible it'd be to look at the logo and accurately guess the prompt. (Again considering the hypothetical novel, if you translated the novel back into English, entire passages would likely be word-for-word identical with the original.)