It's true that people often use 8-bit or 16-bit to refer to things that look they're from an 8-bit or 16-bit console (which doesn't really have any relation to the graphics themselves). But that doesn't mean there isn't such a thing as "n-bit graphics". When talking about graphics in terms of pixels 8-bit means 8 bits per pixel which gives you one of 256 values (usually mapping to one of 256 24-bit colors in a palette). For instance, a gameboy screen has a 2 bits per pixel display so you could call that 2-bit.
So in the case of this jam (with only 2 colors on the screen) you could represent a rendered frame of your game with only 1 bit per pixel (and a palette with 2 color values in it to reference). Hence 1-bit.