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It does kind of say: The GUID is coming from the moderation endpoint, which is hit when you generate a local or cloud AI image based on your prompt. If there is no prompt, there is no endpoint, and likely no GUID.

Obviously Paint could have been watermarking prior to AI though, but this specific AI watermarking appears to be only that.

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The fact that local ai image generation uses an online moderation API is a bit worrying too....

Why not just mod the app to not call this API?

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Probably both so they can change what they censor without waiting for you to run windows update and also so they can collect your information (IP, timestamp, etc) to associate with whatever you did
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Since the watermarker runs locally, you could also do the reverse: generate some porn with a different open model, then run that code to tag it as "Content watermarked by Microsoft Responsible AI"
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