It was called the Master System/Power Base here, etc. The title was doesn't clearly call out anything as it is colloquially called the "SMS" regardless of region. It doesn't say "JP SMS" - it just says "Sega Master System", which could refer to any of the them so that is murky, I suppose. EX: Googling Sega Master System doesn't JUST turn up the MK-2000; it turns up all versions.
As for the  argument, the Lyceum article AND the category identifier also says YM2613, which is 100% not something you'd find on an SMS, regardless of version or country... so I suppose I should be allowed to enter Mega Drive tracks into this category as well? I believe it's just because the original article discussed the SN76489's inclusion on the MD/GEN hardware.
Still, if anything, the rules are clouded as the article specifically defines the SN76489 and does NOT discuss the YM2413 though it is "tagged", as you point out.
This should be further defined for future contests. I'm sure many of the people in this category would have used YM2413 had it been known that you were allowed to use it, myself included. On this basis, I defend my argument that the comparison of pure PSG to YM2413 in a contest is difficult, just as irrilicht points out.