If Pico8 is considered an asset(meshes, particles, premade mechanics), then it cannot be used. If the paid product allows for the creation of assets, or is just an extension of the free asset, then they requested that you remove certain pieces of it, and to give credits. I would watch their live streams they put out. They answer it fairly clearly. Also check the licensing on Pico8. It sounds like it might not be something they allow commercial redistribution on, which is what this would be considered.
So maybe yes, also maybe no. I am hoping it is a yes. If anything. Do your best and give credits, where credits are due.
I hope this helped. Best of luck with the rest of the GameJam!