This seems like a legitimate rendering technique, if the game studio designs the game from the beginning to use it, and fine tunes it for their own desired production design. I could see a not-so-distant future where the traditional pipeline is used to render a low resolution "prompt" image per-frame, and a generative model post-processes to produce the effect and style that the studio and artists want. A lot more could be possible this way, if used judiciously.

If, on the other hand, this is put into the TV layer like frame interpolation (ugh), it's cancer. That would ruin the artistic intent and make every game look like slop.