They are a distinct art style that the algorithm was able to identify. I don't have a problem with it being used as an example. Why isn't it ok?

How are they not ok? Is the color palette used in propaganda eternally tainted in some way? The algorithm distilled the content into a representative palette, nothing more.

It's just showing the results when Mao-era propaganda posters are used as input.

Not sure I understand the concern. I guess "Communist" is a bit broad, but I don't see it as offensive.