I would suspect, since I also read the guidelines the same way, there is really nothing protecting a content creator as far as a court of law goes. A messy situation to be sure. One can claim copyright violation but proving it would be a lot more difficult and expensive as well.

Many of the sites that support Pirates use Hosting joints, many have had success in stopping those or at least having the links removed. There is very little one can do beyond that, sadly.

Encryption will not stop anything, except give the creators a false sense of control. But maybe that is Daz3d intent.