You don't need to even read their law to know that they are speaking only of training and not of output. Otherwise, they would have just suddenly created the world's most obvious loophole. Create an 'LLM' that "trains" on some input and then categorically outputs each file, be it a movie, song, book, or whatever. You've now legalized copyright infringement (and distribution) of everything.
So their law is going to essentially come down to you can train your LLM on whatever you want, but can also be held liable for any infringing outputs.
Makes sense. Imagine having your tape-recorder in your living room and start it recording. Then turn on your stereo. The music that comes out is recorded on your tape-recorder.
Is that a violation of copyright? I'm not a lawyer but I think copyright legislation is about forbidding the production of "derived works". If you just record something but never play it back it is not a "derived work" is it? It only becomes a violation if you distribute it, make it available to others, and thus "produce a derived work".
So training an LLM is like recording. But if you use it as a means to distribute copies of copyrighted material without approval of its copyright holders then you are in violation.
So their law is going to essentially come down to you can train your LLM on whatever you want, but can also be held liable for any infringing outputs.