I think they're trying to apply the same logic that's applied to internet platforms like YouTube, Twitter, etc., where the platform is only non-liable for copyright violations on their platform if they have a good-faith system in place for preventing copyright infringement and responding to DMCA requests. I don't think this logic should apply to ISPs, frankly the entire internet is far too large of a place to be monitored by any one company for copyright infringement, and I'd rather ISPs be nationalized and treated as public utilities than try to fit them into the same legal framework as social media companies.
That being said, even if the courts decide they should be forced into that same legal framework, ISPs could easily satisfy their legal obligations by simply blocking access to copyrighted content via their DNS service (which can easily be worked around by using an alternative DNS). There's no legal reason why ISPs would be expected to block individual users from their network, and even if there were, ISPs shouldn't be allowed to exist anyway, the state (and therefore the people) paid the lion's-share of the cost to lay all that fiber-optic and copper cable across the country, so the state should own that infrastructure and operate it in the interest of the people (Internet access would be considered a human right and publicly owned ISPs would only have prices high enough to break even, not generate a profit).
That would be a fair point if we were talking about like, small businesses in markets that are well-suited to competition, but that is not mpdern ISPs.
Iirc, much of the backbone of the US's fiber optic cable network is publicly owned anyway, it's just the "last mile" that's privately owned, which is the local lengths of fiber that run through neighborhoods to individual residences. But most of this infrastructure was also heavily subsidized by the state, so the way I see it, ISPs are essentially leaches that extract rent from a system paid for by the people and (directly or indirectly) built by the state. Why should we let them collect profit from a network they didn't build when we could own the entire network publicly and set monthly rates to break even, rather than generate a profit (which would keep prices very low, as seen in Every Other Country with mainly state/municipally owned ISPs).