There's a difference between creating a market for something better, so that nobody wants the old thing, and competing _in_ the market for the old thing by copying it directly.
And what would be a read-only version of X like XCancel compete against, exactly? Ads impressions? That would be the only possible thing yet they don't add any ads.
If two things are competing, they are in the same market by definition.
I don't really buy this.
It's like saying "toaster oven/air fryer combos" don't actually compete with toaster ovens or air fryers because they are creating a market for something better
Of course they complete.
Toaster ovens compete with toasters. Microwaves compete with toaster ovens.
Just because it's not the exact same product doesn't mean it's not competing
Would I be allowed to steal LG's designs for a microwave and make a "superwave" that does laundry and heats food? Would you claim those products don't compete because the superwave is "something better"?
If LLMs only made SO redundant by writing code and solving my technical problems autonomously so I never have to think about it, I would agree. But often I do ask LLMs technical questions, and they answer in great detail. And that part is a very direct SO competitor