I am not suggesting she immediately file a lawsuit, only that her grounds for doing so likely would persuade the infringers to stop using the work illegally, give her additional credit or advertising, or whatever she requests--maybe even pay her to license the work. Standing up for and educating businesses about your rights is not just "paranoia," it benefits all artists. Not only is the instructor using the art commercially without permission, she is teaching others it is OK to directly copy anything found online.
If a case does not have merit, no reputable attorney will take it. But clearly such cases do have merit, as evidenced by the one filed in Indiana (though in that instance the art was registered). Don't take legal advice from artists--if your area has a Lawyers for the Arts organization, you can join for a nominal fee, and they can put you in touch with an attorney who will advise you more economically--first half hour is free.
A serious student copying a historic museum work is not remotely the same as someone appropriating a working artist's painting for repeated use in paint parties. The posted article defines "tranformative" as material from the original work being transformed by adding new expression or meaning; or having value added by creating new information, new aesthetics, new insights, and understandings. Nothing about educational use being transformative.
Also, purchase of an original artwork does not confer transfer of copyright. Artists retain all copyrights unless transferred in writing. That is the information some people include with their sales.
Again, from an attorney who filed a lawsuit in a similar matter: "The problems giving rise to the lawsuit occurred when copies of Ms. Duncanson’s and Ms. Wiseman’s artwork were used as class subjects — repeatedly — without their permission, the lawsuit alleges. The above images are used in the lawsuit as an example to illustrate the allegations, which include that Ms. Duncanson’s original painting Blue Depth differs slightly but is substantially similar to the copy at right, which, according to Plaintiffs..."
Duncanson v. Wine and Canvas
I just asked Ms. Conlin if there had been a decision in her case. In her opinion, this does not meet the fair use test, especially if it's for commercial purposes. She said the dispute is ongoing. The Defendants fought personal jurisdiction in Florida so there is a new lawsuit in Indiana.