MS Paint and Photos inivisibly watermark even locally generated output with GUID

Microsoft Paint and Photos embed invisible, server-issued GUIDs as watermarks into locally-generated AI images, even when the image generation itself occurs on the user's device. The apps send prompts to Microsoft's servers for moderation, which return a GUID that gets hidden in the image pixels as an invisible watermark—separate from the optional visible watermark setting that users can control. This watermarking occurs on Copilot+ PCs where image generation is local, though prompt moderation remains remote.