I get what you're saying, and if the author were claiming the music as his own composition, I could see it being an ethical issue. College kids using AI to create term papers, do homework, etc. is honestly not 'wrong' per se, but in the end it defeats the purpose of attending school in the first place: to sharpen themselves into smart, functional adults capable of more. It is wrong, in the sense that the one you are wronging is yourself. A bit of a moral 'grey area', if you will.
Further than that, AI is a tool; much like Ren'Py, or Koikatsu, or Honey Select, etc., etc..... most artists will site the big, licensed tools (like Ren'Py, or any number of programming/coding tools, but more often than not leave KK, HS, or HCC in the fine print (some won't even go there) and claim the work is entirely their own. We know, of course, and the model design is theirs, but it's made possible with a tool that accessed/utilized the work of many, many developers, programmers, testers, and a slew of others-- so decrying an AI stage dressing while being ok with the artist not creating his own coding, game engine, purpose-built computer, etc... would mean the only artists that would be truly valid would be those that sculpt, paint, or compose with tools they designed, made, and implemented themselves. It's not that much of a leap, either. When you credit Ren'Py in your game, you're crediting everyone that was involved in it's creation. When you credit the AI, you're crediting its creators, and everyone-- everyone-- in whatever database it used to 'learn' from.
If you are a solo dev, or limited by resources on how much you can spend, etc., using a free AI source to dress up your own work doesn't seem like it's an egregious sin-- as long as you site the source, and don't claim credit for anything you don't do (arrangement, selection, etc.) and give those who are opposed, for whatever reasons, a warning to steer clear.
That said, I reiterate that I get your point of view, but don't necessarily agree with how severe you seem to think the ethical breach is. just my $.02.