@Switch BlaydeI would disagree with the characterization of this case (in essence), unless of course the Supreme Court should issue a greatly expanded ruling. The case isn't arguing 'whether an artist may use copyrighted material without paying a fee if the new work is "transformative" in its meaning and message', the case is arguing whether a lower court correctly decided whether the new work was transformative.
The difference is pretty significant. Neither side is asking or implying that the 'transformative' test be removed. They're just at odds as to whether this particular use was or was not transformative.
The Supreme Court recently essentially upheld the four-pronged Fair Use test in applying it to another case (Google v Oracle). Interestingly, that case noted that Warhol's use of the Campbell's soup cans would likely be transformative, despite there being less 'transformation' than in this case - but the reasoning is that Warhol's soup can work was in pursuit of commentary on consumer culture, while Warhol's work with the Prince photo simply represents Prince (though some Justices seem to believe that it does represent a transformative work providing commentary on the nature of celebrity).
See the New York Times story: https://www.nytimes.com/2022/10/12/us/supreme-court-prince-warhol.html
or the Washington Post story: https://www.washingtonpost.com/politics/2022/10/12/prince-andy-warhol-print-supreme-court/
The questions asked by the Justices make it clear that the question is 'Was this work transformative?' not 'Is the transformative exception valid?' If the intent were to do away with the exception, one would expect an entirely different set of questions and an entirely different set of arguments, as well as a flurry of amicus briefs that do not seem to exist in this case.
As much as I believe in the 'transformative' exception as an important part of fair use, my lay view of the work in question is that the use was not significantly transformative and therefore fails on that prong of the test (which does not necessarily mean that it's not fair use, though it raises the likelihood that it is not).
But, again, unless the Court issues a much more broad ruling than expected or requested, the odds are that it won't affect the existence of the 'transformative' test, it'll just somewhat clarify what is and isn't 'transformative'.
I agree that, should the Court rule for AWF, the doors are wide open to expand what is transformative, and I would expect some interesting cases down the road. However, if Goldsmith wins, the definition of what is and isn't transformative is only a tiny bit more clear than it was before this case (again, barring some unexpectedly sweeping ruling), and we might still have a bunch of interesting cases down the road.