Not that I wouldn't similarly expect it from Miyazaki in terms of general generative art but the actual source of all the articles/memes about his quote point to a 2016 video where he's being demo'd a disturbing 3D simulation of an oily looking human figure crawling on the ground by its head while the dev explains to Miyazaki and others that 'it feels no pain so it learned to move by its head' and it could be used for horror games.

It's then that Miyazaki expresses the 'insult to life itself' quote and explains the devs have no idea what human pain is. Makes one wonder how the devs thought the reaction would be any different tbh.

Edit: reading that he clarified in an interview[1] a couple years later that his distaste was due to believing the dev was aiming at humorizing such body contortions of realistic humans which he took issue with.

[1] https://realsound.jp/tech/2018/10/post-270755.html

> Miyazaki was shown an AI-generated character. The character was a scary monster that used its head as a leg because it couldn’t feel pain. The person presenting it said its movements could be used in making a zombie video game.

To which he stated:

> Every morning, not in recent days, I see my friend who has a disability. It’s so hard for him just to do a high five; his arm with stiff muscle can’t reach out to my hand. Now, thinking of him, I can’t watch this stuff and find it interesting. Whoever creates this stuff has no idea what pain is. I’m utterly disgusted. If you really want to make creepy stuff, you can go ahead and do it. I would never wish to incorporate this technology into my work at all. I strongly feel that this is an insult to life itself.