That seems totally reasonable to me. A large part of fair use is about the purpose of the use. It seems like a reasonable compromise that what is fair use in one context might not be in another. I can't think of any alternative to fair use that would make more sense.

I think the only unreasonable part is llm companies are implicitly or sometimes explicitly advertizing their products output as being fit for use in other projects. I think that is a false advertising problem.