The key aspects that the supreme courts in the US looked at when they decided on the author guild vs google, was if the use of the work supersede, supplant or become a replacement for the original works. They also looked if google sold portions of the copies, and if the activity enhanced the sell of the original work for the benefit of the copyright holder.

Some parodies has been found as non-fair use when they supplant or becomes a replacement for the original work. People often get upset when that happens with head lines like "they are outlawing parody!", but from the laws perspective the outcome of a situation is actually very important when determining fair use. In the general case, parodies do not replace original works so the law works generally fine. I guess one could also view it as a transformative work in general do not supplant the original work, while a derivative usually do. A generative AI version of grumpy cat might behave more like a derivative than a generative AI version of a generic cat, even if both are using the same technology.