It seems like an interesting attempt to get around legal issues.
They can't say "Minecraft" because that's a Microsoft trademark, but they can use Minecraft images as training data, because everyone (including Microsoft) is using proprietary data to train diffusion models. There's the issue that the outputs obviously resemble Minecraft, but Microsoft has its own problems with Bing and DALL-E generating images that obviously resemble trademarked things (despite guardrails).
They can't say "Minecraft" because that's a Microsoft trademark, but they can use Minecraft images as training data, because everyone (including Microsoft) is using proprietary data to train diffusion models. There's the issue that the outputs obviously resemble Minecraft, but Microsoft has its own problems with Bing and DALL-E generating images that obviously resemble trademarked things (despite guardrails).