You are right, and there were multiple categories in the competition including painting, drawing, and photography. This piece specifically won the digital art / manipulated photography category. In this instance, what he did isn't much different from manipulated photography. You start with a pre-formed image and change it. He worked within the parameters of the category.
That being said, creating a piece like this by hand, unassisted by AI like Midjourney, could take dozens of hours to complete. That is a luxury other competitors probably didn't have/use. This is like winning a short story competition using a ghost writer.