Sorry but the downvoted comment you are responding to has this correct: the lawsuit was precipitated by the Archive deciding copyright law was null and void “because Covid.”

Instead of “controlled digital lending” which is what you describe at the start of your comment, the Archive was offering unlimited copies of everything it had in its collection.

Note: I fully support format shifting and contend that it’s a logical extension of the Betamax case (time shifting necessarily involves format shifting) and I’m absolutely incensed about those assholes at the Archive doing their level best to give the court an excuse to rule in favor of the publishers.

The publishers could not have asked for a better set of facts to litigate if they had tried.