As someone who's seen almost all Ghibli movies, I can tell you that Miyazaki is not averse to the grotesque. Most who have seen Spirited Away probably remember it as a wonderful and positive film, but when it was showed at my younger sister's 10th birthday party, most of the children were terrified, based purely on the animated monsters.

There are creatures more disturbing in his movies than that zombie. The difference is the deep human empathy that goes into their creation.

IIRC, almost every frame in Ghibli movies is drawn by hand, so to see an AI created zombie that (in his view) mimics disabilities suffered by his friend in order to achieve a creepy effect, how could he not find it disgusting?