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of AI programs that can generate altered images, and then post those to Instagram and anywhere else.

Instragram getting rid of it in no way prevents anyone from doing the functional equivalent anytime they want, though it takes an extra minute or two. And there's certainly no mechanism by which it's ever reported to the user that this happened with one of their photos in that case either.

What they tried to here is keep users within their ecosystem. Every time someone leaves Insta to feed a photo into Leonardo or whatever, they switch apps. The aren't watching the ads. They aren't 'engaging'. That's actually the nefarious goal here: Keep the customer's attention.