Yes. And judges (in the context of the legal system) have generally decided that non-human animals and machines are not entitled to authorship (and copyright) r

Yes. And judges (in the context of the legal system) have generally decided that non-human animals and machines are not entitled to authorship (and copyright) rights, and I don't see "stable diffusion" changing this. So, even if you use such tools... as far as the law (in its current form) is concerned, you are still the author of the work. In the context of an art competition, I can see how it would be useful to restrict the use of such tools (as you state), but then it should be done explicitly, rather than through generic/vague "you should make the work yourself" clauses (and, again, it might not be possible to effectively enforce such rules).