I will tell why this is problematic because no one else does.
Technically, it's not against the rules. However, it's unfaithful to the limitation that the rules pose by "creatively" working its way around them. The purpose of limitations is to work within them, not around them.
Drawing bunch of bitmap images by hand and creating a script to match the color of a pixel from your drawing with the coordinates where that color can be found on the spritesheet, then doing this thousands of times over and over to generate a huge list of every pixel in your drawing is an "excessively creative freedom" and while it technically abides with the rules it's still clearly against the soul and spirit of the game jam.
Similiarly, one could take a .wav file from a mixist bitpack and pick single sample points one by one to construct entire new sounds and waveforms from them. Technically the rules don't explicitly disallow this and technically you're only using content that's provided in the pack. But if this was considered an acceptable practice to do, everyone would do it, and then someone would write a script to automate it and what's the point of a bitpack then?
Is it fine to break any rule once? Is it fine to break a rule multiple times if it's justified by creativity?
Don't get me wrong, I don't hate this game at all. This is a great collaborative piece that shows what bunch of people can achieve together. The use of 3D projection, voice acting and beatmaps together is impressive. The only thing I'd complain about would be the input precision for the notes, and it isn't even that bad. This game is complete with the theme and everything, this just isn't the right major for it.
Don't submit an entry to a game jam knowing it's so good that people will like it no matter what. It's unfair and if anything, outright disrespectful towards other participants. If you have a cool concept for an entry, you can wait until the right major to execute it on. Or, you can publish it independently. Maybe you could even request another major with the HTML5 format and more lenient rules.
I loved this game as is and it definitely wouldn't have "worked" the same if it actually only used icons from the bitpack, or slight (even the definition of "slight" is up to debate here) modifications or re-croppings of them. But as I said, there would've eventually been another jam where the
rules spirit and soul of the jam would have permitted reasonably allowed it.
Additionally: There are couple entries that break rule or another (one doesn't run without downloading jQuery from Google, one creates sprites from scratch) and sometimes I feel bad having to penalize points from rulebreakers. That's fine, sometimes people can be ignorant, misunderstanding the rules, just taking a quick look at them and missing a bullet point etc. But this entry is clearly just a big flex that says "watch me smartass my way around the rules and get away with it" and is 100% conscious about it.