The demand is huge, as much as I may dislike AI 'arts' myself, you can't ignore the demands. Deepfakes, undressing apps, to AI 'art'. Each has its own market, and a huge market at that. Meaning that there are people who genuinely enjoy and love it. You can rest assure when utilizing AI to create your games because there's demand for it.
If you use AI-generated 'art' in your games, please state it clearly, or proudly, whatever. You already have a market for it. People demand such games, and you can supply that demands. You can do some market research on this forum alone, when people search for something, but the current existing games doesn't have what they are searching for. It's your chance to fulfil that demand, using AI to create that exact scenario is entirely possible since you have that flexibility.
If you want or dream to become a game developer but you don't have a formal degree for it (cs, art, literature) or the required skill for 2d/3d art and its derivatives (character design, sculpting, posing, animating, concept design, create a compelling visual, etc), writing and storytelling, coding, project management. AI can help. You can utilize AI to overcome the limitations, learn the basics and gaining general understanding on game development and its industry while actively trying to explore, experiments and build things using AI as a tool. Utilizing this forum to learn as much as you can, receive feedback and criticism, learning the know-how from existing devs. The more you experiment and explore, the more you get the gist of it. And you can fulfil your dream to become a proper game developer. I can respect that.
On the other hand, people who dislike AI art can simply ignore your games. You can also ignore them, recognizing that they are not part of your target market. Focus on your own audience. There's no need to play tricks, such as providing 'sketches' or creating fake 'full process' video to conceal AI usage in attempt to attract as many users as possible. No need to be THAT greedy, maximize your market, enjoy it with people who genuinely love it. Use this chance to learn while make a living from it.
As much as people hate AI 'art', they loathe deception even more. People who conceal AI 'art' as original, hand-drawn, human-made work, only to claim that they 'forgot to add the tags' when caught. It's infuriating, and even more infuriating that sometimes the anger directed at the wrong party (the site uploader) and creating another dizzying, eternal AI denier vs AI worshipper which can be easily prevented if the devs clearly stating they are, in fact utilizing AI and don't play stupid tricks. There's a reason why some users on this site are pushing for stricter AI-related rules, from adding additional tags, creating pages specifically for AI-generated content, up to an outright ban of all AI content.