Thank you for your input - I just gave them the green light to say it's OK as long as the battles are not random. In general I would say battles (even turn based ones) are fine for plot purposes.
I really don't want to put too many people off trying to making a game because of stingy rules. They said they wanted to do a survival horror with turn based battles which I think is fine. I offer my apologies since I can well understand the rules being vague and what constitutes a non RPG (hence why my jam page is so rambling).
Basically it's best not to worry too much and just go with whatever idea comes naturally to you. The main thing I wanted to avoid in a nutshell is for people to recreate Final Fantasy or Dragon Quest type games.