well making a game on pico-8 is almost like making a prototype for a game idea you have, and making a game on pico-8 is relatively faster than other game engines or frameworks, and after testing it myself, I see as the best way to make a game for a game jam.
And for the remakes, yea there is no popular games from pico-8 but their remakes are, like celeste they have made it on pico-8 first but the reason was they have originally made first celeste for a game jam, and after that they remade the jam on a framework, I don't remember which but it was a framework and not an engine.
But I recommend and prefer pico-8 for 2d jam games, because making a game on it is pretty fast, and it teaches lua one way or another, which is a great language, now I am working on LÖVE (a framework for lua to make games) for the remake of this game, I really like the idea I came up for this game that is the reason I want to make remake of it, if that goes good I may announce it on discord server of the jam, and upload a playable demo on itch.
And btw, gamemaker is not that bad, the only limitation of the free version is commercial use, which is not good if you start game developing with 0$ and plan to sell your game, but if I were time travel to start of this jam with the experience I now have, I would still make the BigHandsWizard on pico-8 first, since jam had a long time limit, maybe I would think about making it on LÖVE, but I love and appreciate my time on pico-8, I wouldn't be able to make this game for this game jam, if I never knew about pico-8.