They're free to define their rules however they want, I'm free to disagree on the validity of those rules, and the broader community sentiment will decide whether these awards are worth anything.
A gorgeous otherwise-monochrome painting that happens to use a little bit of mauve isn't a worse painting because of the mauve. If that painting is nominated for inclusion to a contest that requires the use of only one color, it is correct to reject that painting from consideration. This rejection would only be a problem if the requirement wasn't clearly disclosed up-front.
As for the rest of your commentary; you're free to gather likeminded buddies and start the "Robot-Generated-Art-Inclusive Indie Awards". As a bonus, I expect the fuckoff-huge studios would be quite excited to quietly help fund the project through cutouts.
To play devil's advocate, AI helps small studios with a limited budget actually way more, because they can bring a game to market, that maybe would've needed 10 people before, but needs only 3 people now. I'm not saying this is good or bad, just that that's the new reality, whether we like it or not. As I said, I'm against GenAI in many fields, e.g. I absolutely despise AI generated "Music", cancelled my Spotify subscription because of it (they insist on putting it into playlists and you can't disable it), but that doesn't mean, anything which was produced with 0.1% AI is bad, unethical, etc.
From the "What are the criteria for eligibility and nomination?" section of the "Game Eligibility" tab of the Indie Game Awards' FAQ: [0]
> Games developed using generative AI are strictly ineligible for nomination.
It's not about a "teeny tiny usage of AI", it's about the fact that the organizer of the awards ceremony excluded games that used any generative AI. The Clair Obscur used generative AI in their game. That disqualifies their game from consideration.
You could argue that generative AI usage shouldn't be disqualifying... but the folks who made the rules decided that it was. So, the folks who broke those rules were disqualified. Simple as.
[0] <https://www.indiegameawards.gg/faq>