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Basically we don't want people making copies of other people's art styles by focusing on their own art in a larger set. Because that makes it clear that you are essentially using their own art to create an art machine to replace them; a direct threat to their individuality as an artist and their commercial interests (why commission X or get one of their adopts if you can just generate an X instead? OK, there are intangibles, but if you just want the art, let's say you could get it), as well as feeling kinda creepy if they're dead (people recently used artwork of a deceased fan's character to illustrate a story and it didn't go over well). We may tweak the age limits, but 25 years is perhaps not too long if you knew someone personally.

It's not clear what you mean by "certain public domain characters" but the intent was primarily to protect fursonas and other characters used in personal work (including after death); as opposed to, say, World Cup mascots, or Paddington Bear. Fan-but-commercial works like Lackadaisy characters might be tricky. We will probably tweak the specifics as cases came up, but we felt we needed to make a first stab at it now before we had a lot of work with no regulation or guidelines.

The depth of feeling against AI is very strong with some people. If we can defuse their ill-will with specific concessions, while avoiding a complete ban, I think that is a good deal. The alternative was either banning AI outright, or saying "we don't care about your views", which would likely have led to the departure of several valued members and probably some staff.

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