It doesn't matter whether it's a prototype, a full game, early access, or a found-footage horror movie. If you say "No generative AI was used" but you used generative AI to make the thumbnail, that's a lie. If you're lying to game companies about it, that's even worse, because it means you're trying to engage in business under false pretenses.
We're not telling you to abandon game development. We're reminding you not to lie about it.