You are absolutely right about that, but people did it anyway.
Back then, we have decided to let those people submit their games to the game jam, so long as they disclosed that their games contain AI generated assets like on stem. Our community's feedback for those games then tried to point them towards other sources of free to use assets, without the use of generative AI. I know of a few game devs who have since stopped using AI generated assets through this approach.
However, this approach is no longer feasible with the recently increase in completely AI generated games (and even AI generated game reviews) and we have thus decided to ban AI generated assets from all of our future game jams.