Copying Is Not Reproduction
SPOILER!
Project 2501 can copy itself, but it argues that identical copies do not solve the problem of being alive. A population of perfect duplicates carries the same weaknesses and produces no real variation.
What it wants instead is
The Merger Is Not Motoko Uploading Into the Puppet Master: change through combination. Biological life survives through reproduction because descendants inherit information without being exact duplicates of either parent. Project 2501 sees that mixture, along with mortality, as part of what its current existence lacks.
Why it matters
This is why the Puppet Master does not simply want access to Motoko's body or network privileges. It wants an encounter that neither participant can completely control the outcome of.
The Merger Is Not Motoko Uploading Into the Puppet Master
SPOILER!
Project 2501 proposes a merger, not a takeover and not a backup. Motoko asks whether she will still be herself afterward, and Project 2501 cannot promise that she will.
That uncertainty is the condition of the proposal. If either participant emerged unchanged, nothing new would have happened. Motoko accepts a transformation whose result cannot be guaranteed because remaining exactly as she is has become the limitation she has been circling throughout the film.
What changed
The entity that survives is neither Motoko alone nor Project 2501 alone. The film treats the loss of a fixed identity as the birth of a new one.