Same reaction here. I think the author certainly crossed a line by using a diffusion model to publish an image of a dead famous person doing something he never did.
The only question here is if using that image is tasteful or not.
Also, suggesting that Jobs did not have these red lines is not making the situation any better.
It doesn’t matter if they actually cheated at sports or if the image is real. The threat of it being untrustworthy is actively eroding trust.