I'm aware. But if you read my explanation a little more carefully, you'll see that the argument being made is that this de facto constitutes a form of lossy compression.
The easy comparison is that a JPEG does not store an "original" image, but it contains information that can be used to almost perfectly recreate that image, with the help of a little math.
If the same argument can be said to hold true of LLMs - and yes, that is very much a load-bearing "if" - then they would constitute a form of lossy compression.
Well, like I said, that comes down to whether, legally, that stenographic embedding would constitute "reproduction" or not. That's what the German case hinges on. Obviously not relevant to US law, but a) a similar case could be made in the US, and b) X operates in the EU.
To play devil's advocate, SpaceX would most certainly argue that what they're doing is equivalent to storing a hash, like how Microsoft's PhotoDNA system works. PhotoDNA can detect CSAM without storing CSAM because it only stores the image hashes, not the images themselves. So there's pretty clear legal precedent for them to point to.
(NB: There has been work done by security researchers on reverse engineering images from hashes, so even that isn't absolute.)
It's a legally complex area where we're likely to see case law evolving rapidly.
(ETA:) Note that this is not actually the correct term for how the data is being stored. See discussion below. I just didn't want to derail things by getting into it here.