This is a "pre-publication" version has confused a few copyright law experts. It seems that the office released this because of numerous inquiries from members of Congress.

Read the report here:

https://www.copyright.gov/ai/Copyright-and-Artificial-Intelligence-Part-3-Generative-AI-Training-Report-Pre-Publication-Version.pdf

Oddly, two days later the head of the Copyright Office was fired:

https://www.theverge.com/news/664768/trump-fires-us-copyright-office-head

Key snipped from the report:

But making commercial use of vast troves of copyrighted works to produce expressive content that competes with them in existing markets, especially where this is accomplished through illegal access, goes beyond established fair use boundaries.