Simple fix, they need a separate categories for a game art award—no AI—and the rest of the categories (perhaps including game of the year, best new game) should allow AI.

Right now the rules they're using are going against larger forces in the world that are going to become standard (if they're not already).

And to your point, these are indie developers that are David's going up against the AAA Goliath's that have a bottomless purse with which to shower money on a "product". I dabble in art (and wrote some indie games decades ago) and I am fine with AI-generated art (despite my daughters' leanings in the opposite direction).