Your only thinking of it from a potential winners point of view. Their investment in the Jam is meant as promotion for both Construct and NG. Not just for contestants, but people playing the games. If a good quantity of the submissions are of "limited" quality, it's actually negative as a promotion.
That's actually a good point.
Though I still think solution C up there is the better option. I think they just looked at Solution B and decided.
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