Well it does matter for lots of reasons. You can't claim ownership of something generated by AI. You can't say "this is my art". Also as you alluded to, a lot of people just think it looks worse and it does, that tends to happen when you take the skill and technique out of art. Also AI unless trained on things you got permission to use, is literally stolen art. Also also, a game made using AI CGs kind of has to cater the story to what the prompter can manage to get the AI to do, rather than designing a satisfying story and then getting art to match it. Because if the AI can't be consistent then the story can't be consistent.
its nice you care for well being of the game with art being bad but in the end its twistedscarlett creation, as a dev he should have creative freedom, we can give him ideas for development but he is the main executive of this project, if i was making game i would want to make it like i wanted to, if AI would help me considerably without much loss of quality then i would took it too, as i said i am pragmatist and maybe i am also little disappointment that real artists take 12 months for single scene update
if you think waiting 6-12 months for better quality is worth more than 2 months thats your freedom but i think he is doing fine job 2 months updates are awesome and when i look at those other games that take 12 months for updates i begin to think if i live after 10 years to enjoy that game or not and if its even gonna be finished in 10 years in the first place because thats just 10 or so updates
unless you giving him insane amount of money thru patreon then you could ask for some specifics or take ur money away everyone is free to do with their money what they want, but on the other side thats the reason i dont support much myself because if im giving money then i want to take some decisions in game making which i never take, and i only chip in games that i like on very high levels verging of 90% of content if i dont like game more than 10% or how developer behaves i never support them, thats my freedom as player, people that giving money are investors basically imo
and about this stolen art we cant say that for sure either because we dont know if AI used art or just real people photos, but if it used his art to train then it should be ok right? we can be sceptic about everything he said and dont believe him but to tell you truth i dont really care, artists publish their old works for free to gain publicity anyways, its similar to posting photo then someone editing it, the worst crime for me would be if someone said its his own work but it depends of how much he would edit it i think, if its considerably different then i would let go because its just not the same, like two different artist would draw same ass and tits and they are accusing each other because its just little difrent shape size color and pose, while people like me just want to look at tits and ass bro
last thing i dont yet understand fully is the difference between human training and AI training so if i copied same style of scarlett because i trained on his art and then drawjust like him but differently then that wouldnt be ok im assuming because AI doing same exact thing or would it be ok because i had to put my work in it?