I personally wouldnt take any commission from someone using AI. Despite the well intentions of commissioning a real artist, it still is using an AI program. AI steals from many different artists. The usage of AI in general for a visual reference would make me uncomfortable. I know a lot of my friends would say the same thing. It's better to just get a full custom from someone <3

This!

I personally wont mind as the generated image was used as a reference due to the difficulty in communicating detail in words if the person commissioning is not an artist.

...Speaking from perspective of an artist who did custom adopts and trying to visualize what someone wants from a wall of text....

Though with the caviet the ref pic was declared as ai generated and not posted publically.

I think using ai pics as a reference that way is similar to using someone elses pics as a reference. E.g. say you wanted a commission of saffira and your best ref for what you had in mind was drawn by someone else.
Its fine as long as you dont claim ownership of what you didnt create/purchase

If I ever start doing commissions I would ask if it is a AI image first. If yes, I would tell them (politely) to not give AI images to use as references in the future and (politely) decline unless they can provide a well detailed reference via text.

If they spam that "No AI" art meme, then the answer is almost certainly no. Otherwise ask. If they say no, well you still got the toaster's picture for your private collection. But I wouldn't bother mixing to be honest. Keep the AI open for commission ideas that every biological artist refused but don't mix the two. Because hey, they had right of first refusal and they used it. If they don't want the money then the toaster gets the job.

Honestly, as pretentious as it sounds, I would recommend learning to draw and stop commissioning anyway. That's what I did years ago before this AI drama was a thing. I fought for years with artists that were native English speakers that still somehow couldn't read past a first-grade level, with artists with some utterly petty terms for buying art from them, and with artists that got whiny when I'd ask for just a visual reference of my darker or more villainous characters (not the character in the act of being villainous, just the character.) Then I finally gave up commissioning, took some art lessons, and started drawing something every single day. And that last part helped more then just my ability to hold a pencil....