I'm really confused why would someone call this "perfectly fake". Have those people seen the real covers? The covers were meant to catch your eye, to evoke some kind of emotion. Compared to them, most of the examples evokes only repulsion in me.
The main issue is that it's hard to generate good looking faces without a specialized model (because we're so picky about humans), and the companies generating models like DALL-E don't want to teach them how to generate faces in case of bias.
I loved it at first and got quite into it but I have seen enough of these images now that the novelty has worn off and they are just kind of shit.
Physical painting inspired by GAN art might be cool but I don't have the talent for that. There is also something lost for sure when I know I could make a 100 of these album covers in maybe 20 minutes of tinkering around?
Here's a presentation for Papers We Love San Diego on a paper describing such a technique:
https://www.youtube.com/watch?v=KFORVMT8AWs
I would argue that the proper way to do this while respecting other creators is to create your own original source images and then train the model based on those, before then applying the style to some other original image of your own.