That's a machine learning algorithm. That model is drastically different than Generative AI. You feed things into Generative AI(like stolen artwork without consent) and then it can use that stuff to make something. Machine learning is something that grows as it experiences things. The machine itself does things and then learns depending on the situation and decisions made. Interacting with the AI and adding filters can help the AI learn and grow. You don't have to steal anything or undermine anyone else to do this.
But to answer your question, it'd depend. Are the artists fine with it? Or did Disney just take the artwork that they owned and shove it into an AI with the artists saying "Please don't do this to my art."? If every artist of every piece was fine with it, yeah that's fine. You can make an ethical Generative AI bot if you're an artist.
Make a bunch of art, shove your own art into it only, and generate from there. It won't look good but it's a model built off only YOUR work. You aren't stealing anything. It's a choice to steal the work of artists to make a Generative AI better.