The point though, is that they package 3rd party applications and libraries.

If they ban AI, they won't stop packaging apps and libraries from parties that do use AI. They wouldn't even know who does or doesn't.

Sure, this is (mostly) about direct contributions to Debian.

Proposal C does discourage use more broadly but acknowledges that many upstreams take a different view and that it would be impractical to ban them from using it.