Hey there, sorry for the late reply! I was just checking the community and realized that Preggo never got back to you on this, even though we did come to a consensus.
Basically - the compromise you are offering is fine by us. While one of the points of the jam is to try and work together with people you don't know to get a feel for collaboration, we understand that it can be stressful and not everyone is up for that, while still wanting to participate.
While we are very much against the use of AI in development, we have agreed that you are permitted to use AI-generated artwork under the stipulation that your game will not be eligible for any rewards. We will still give feedback so that you know what we thought of the other aspects, however.
I hope this is an acceptable compromise for you, and we hope that participating in the jam may make you more open to collaboration in the future so that you won't need to use AI next time.
Best of luck ahead of time and we look forward to seeing what you make!