dev should be commended for the effort of making a video game, and simultaneously condemned for soliciting money using unethical tools (trained on unpaid/uncredited artists and actively supplanting artists' roles in projects like this)
If this dev is simply "recreating their own drawings using AI" then why is this fact not disclosed in any of the marketing? Your argument would hold water if they detailed their process and showed how they only use it to glitz up their shading or whatever. Given what the art actually looks like and the lack of reference for what the creator's art looks like without AI, we shouldn't assume they've done any more than give the AI a pose and rough character design to work with. The visual assets created are still unambiguously the product of AI generation.