> distributing the original image violates the non-commercial clause of the original images because someone, somewhere, might somehow have made money
I agree with the rest of your post, but this point seems a bit uncharitable.
I think the claims would be:
1. It's a breach of copyright for Megaface to share the images in any case without attribution & replicating the CC-NC license. It would (presumably) be OK assuming Megaface were to correctly apply the CC-NC licenses to the dataset.
2. It's a breach of copyright for anyone consuming Megaface (e.g. Google) to use those images for commercial purposes.
And your argument for SD applies to 2. that regardless of license, it's OK to create a transformative work. But it still doesn't get Megaface off the hook for 1. - distributing those images without the license.
I agree with the rest of your post, but this point seems a bit uncharitable.
I think the claims would be:
1. It's a breach of copyright for Megaface to share the images in any case without attribution & replicating the CC-NC license. It would (presumably) be OK assuming Megaface were to correctly apply the CC-NC licenses to the dataset.
2. It's a breach of copyright for anyone consuming Megaface (e.g. Google) to use those images for commercial purposes.
And your argument for SD applies to 2. that regardless of license, it's OK to create a transformative work. But it still doesn't get Megaface off the hook for 1. - distributing those images without the license.