I don't see a gloss for "cop out" that matches the one you give, and the only one I'm personally familiar with is most similar to sense 1, "perform in an insufficient, negligent, or superficial manner".†
And even there, I would think of the derived noun as being the basic vocabulary item, even if the etymology is the other way around.
That said, the sense I get from "Cop cops it after Copilot cops out" is 'this is using vocabulary I don't know, because it's British', not 'how is it possible to put the words together this way?'. It looks like a fairly normal sentence using exotic vocabulary.
† As a separate issue, I don't think the gloss you give can be correct here, because the thing that's supposed to have copped out is Copilot, and what it did was to produce false statements, not surrender before a fight.
If we want to rephrase this headline to avoid any use of the token "cop(s)", it looks something like "Policeman gets in trouble after Copilot screws up" to me.
