It's "fair use" to read, analyse and understand code. So no, there's no difference between what an LLM is doing and what a human brain is doing when it comes to reading and analysing an open source project.
So what Cloudflare is doing here is not wrong. Sure, it's a little bit of a "fuck you" to Vercel but they're well within their rights to create a derivative work. They get a little bit of a leg up because the Vercel provided unit tests to validate against.