This is where you are wrong. US Copyright clearly states that AI generated content can not be copyrighted - as has been talked about amply in the beginning of this discussion - as there is no “human authorship”.
Works That Lack Human Authorship
As discussed in Section 306, the Copyright Act protects “original works of authorship.”
17 U.S.C. § 102(a) (emphasis added). To qualify as a work of “authorship” a work must
be created by a human being.
It does NOT matter what Midjourney tells you, national law always overrules any individual terms of service.
You can charge money for AI generated content, like images, because they are free of copyright. But anyone can just grab or screenshot your generated content and resell it exactly as is, without modification; And there is nothing you can do about it, because you do not own these images.
You also misunderstand the ArsTechnica article, which itself is plain wrong. Kashtanova , the creator of the visual novel, got the copyright for the visual novel for her complete work, because she did substantial work on the novel (text, formatting, design, story, etc.) and the AI images are only a small piece of the complete novel.
She did NOT get the copyright for the individual AI generated images.
The author of that article simply doesn’t understand US copyright law.
And I’m not sure why you quote the Epic marketplace terms, as it has no influence to wether you own a copyright for an asset or not.
It’s simply there so that Epic can not be sued if you sell assets you don’t own the rights for.