The images on the article clearly show that they’re not storing the data, they’re storing enough information about the data to reconstruct a rough and mostly useless approximation of the data (and they do so in such a way that the information about one piece of data can be combined with the information about another one to produce another rough and mostly useless approximation of a combination of those two pieces of data, which was not in the original dataset).

The legal and ethical failure is in commercially using the artist’s works (as a training model) without permission, not in storing or even reproducing them, since the slop they produce is evidently an approximation and not the real thing.

It’s like playing a telephone game with a description of an image, with the last person drawing the result.