Earlier quoted context omitted.
I bet it's 2 because OP said they used "admittedly obviously AI generated from the hands" and a lot of AI generation makes really funky hands that you have to fix because it looks so bad. So it sounds like OP slapped some half-assed generated images into a game and tried to submit it. Valve now can't really trust someone that does that to have done any due diligence.
The OP's only other reddit post says that they want to start a corporation to avoid associating their name with the game, which is a pretty big red flag to me. "I've been developing a game for a while now, and am near ready to release it on Steam. I'd prefer it not to be associated with my name (as in I'd prefer people googling my name and future employers being unable to find out i developed this game )."
Ask Alex Jones...