There was no copyright on ANSI Art; people screen-captured it and used The Draw or another ANSI editor to modify it.
That is not true. If someone created ANSI art, then they held the copyright. If they publicly distributed it without a copyright notice, that didn't invalidate or change the actual copyright it carried. It was simply a youthful naïvete about licensing that they didn't do the proper legalese.
If ANSI art was "allegedly in the public domain", then people who screen-captured, modified, and redistributed it were pirates, no matter the amount of youthful naïvete.
ANSI art is a creative work like any other, and the U.S. automatically grants a copyright to "authors" (artists) of original works from the moment those works are "fixed." Registration is not necessary. See: https://www.copyright.gov/engage/visual-artists/
There definitely was, and still is. Copyright is not defined by the presence of a "(C)", a "(c)", or even a "©" in some text. What the ASCII/ANSI Art world did not have was a culture of litigiousness. People rarely even made a fuss over copying. In part this was because the whole mechanism that got the art distributed to its viewership involved huge amounts of breaches of then copyright law.
(The legal frameworks that allowed computer systems to be exempt from copyright restrictions, if they were just making copies in the ordinary course of transmitting things around computer networks, did not exist until the turn of the 21st century. Under U.K. law, for example, the way that the WWW worked was technically a massive violation of copyright until The Copyright and Related Rights Regulations 2003 came along.)
The law was not different. People's attitudes were.
Fire Escape was famous in St. Louis, Missouri, for her meticulous work as curator of "Fire Escape's St. Louis BBS Directory," the authoritative monthly list of bulletin boards in the 314 area code. Even Boardwatch Magazine recognized Fire Escape's directory as "one of the most accurate and detailed bulletin board lists in the world."
And Fire Escape was one of many sysops around the world who often repurposed older so-called "public domain" ANSI art to enliven her bulletin board.
This blog post traces the origins of several welcome screens from Fire Escape's BBS, as well as alternate versions made by other people. It shows that adapting old ANSI art was a widespread practice on the BBS scene, and it wasn't limited to sysops or programmers -- even ANSI artists sometimes reused their own work.