What it has to do with that, is not that artists are literally prevented by the law from making bad art.

Instead, it is that artists should be able to make bad art, without suffering significant negative consequences from doing so.

So, you should interpret the statement as being "artists must be able to make bad art, without suffering significant negative consequences for doing so"

That is the intent of the title.

This is what "allowed" means in this context.

It means "it must be possible for them to do this, while not suffering significant negative consequences."

Because by "allowed to" what it means is "to be able to do so, without suffering significant negative consequences."

So, that would be the definition of "allowed to" that is being referred to, which is both true and justified.