It's hard to say from Linus's statement in the COPYING file alone, what his intention was.
From common usage, you may regard such an interpretation as ridiculous, but that doesn't
somehow invalidate the interpretation of the licence. If a different contributor to the
Linux kernel wanted to make the interpretation I've made, then they could well take someone
distributing something like Unreal Tournament on a LiveCD to court, and see if the court
agrees that it's a collective work, and falls under the requirements of the GPL, as being a
"work based on the Program", and that Linus's disclaimer only applies to derived works.
I certainly regard anyone making use of my GPL licences code as being in violation of the
licence, if they release a collective work that does not itself comply with the GPL licence
(but then I don't have a Linus like disclaimer in my copy of the GPL).
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