What does the value of quoting a chatbot, or what does the improvement afforded by quoting a chatbot, have to do with what should be allowed? What is and is not allowed is an ethical issue, not one of pedagogy. Being lazy and unoriginal is allowed already, this is just a new means of being lazy and unoriginal so long as it isn't also done unethically.

A teacher is still free to give an F for someone who writes an essay full of block quotes to ChatGPT. They're just not obligated to give an F and recommend disciplinary action.