Blaming Stable Diffusion for danbooru’s infringement is sideways. Like, imagine I plugged the power in my house to piggyback off of yours. Then my friend comes over and plugs his gaming rig in and draws a shit ton of power. Are you going to be mad at him, or me?

First of all, copyright infringement is not a wire that when you cut off one side the other one is also unplugged. When you take down one infringer, every other one that took it from them is still up. C&D'ing Danbooru is not going to take their works off AI models.

Secondly, the easy answer here is both. I don't see why you think "your friend" gets to get away scot-free. They are mooching just the same and you think they gotta get a free pass? Did you read what I said about linking? Even in your analogy, maybe I already complained to you, maybe I agreed to let you use it if you hand out my business cards, but then comes your friend offering my power cord along with Steve and Mary's to the whole neighboorhood and not even telling where he got that.

Profit is vital here - if a person isn’t making money off their CGI, legally, they’re in the clear.

Also, no, profiting is not required for it to be a copyright violation liable to pursuing. The rights owners can take down any work that is not licensed by them. Generally they only don't bother because having an eternal whack-a-mole with the internet is expensive and tiresome. But that doesn't mean it's fair use. Fair use has specific requirements.

No idea why you think this is just about $5 patreons though. Seems like most of the major models have been trained on copyrighted works without authorization.