In my opinion, using AI to fill in for skill deficits when you are new and/or unskilled is where people run into the biggest issues. Don't have programming skills? Good luck validating AI-generated code, or fixing anything it does wrong. Think AI will cover for a lack of art skill? AI art is often discernible from human-created art, and of all the uses of AI in game dev, its use to create visuals and art assets is often disliked the most. If you're going to use AI for visuals, at least spend a lot of time to try to get a cohesive look and feel to the game.
Understand that game jams, especially the GameDev.tv game jams, are about learning and seeing what people can do with game design and development in a short period of time. The overuse of AI goes against the spirit of learning, and isn't likely to do a good job showing what a person (of any skill level) can do within the time limits.
That said, I think there are ways to use AI artistically, and there is a spectrum of how people use it ranging from creating obvious, soulless slop, to something that might even be impressive. But without art direction skills, and the skills to modify and adjust the assets AI might create for you, people probably won't appreciate it much.
Build up your programming skills, work on art direction skills, and then down the road, maybe using AI as an extension of your own skills will allow you to produce something that won't come off sloppy, and will clearly demonstrate your own care and attention to its production.