This shit runs rampant in concept art, comics, illustration etc, I bet I could find a shit tonne of photos used for reference in painting for most games released nowadays, and then most of those probably wouldn't even use them as reference and actually just crop and paint over the photo into their work.
Its a very very blurred line. Things like crowds of people, textures, forests or trees, cityscapes. Stuff that takes so long to paint manually almost always gets cropped in (I use textures occasionally for instance) and painted over.
If your painting into it, when is it still the photo, and when does it become something new?
Honestly, this is still quite minimal, and clearly adjusted. Also not the focus of the image. You can get away with it. Some people might not like it, creatively or artistically (me included), but I don't think there's a problem to make a huff over really.
Ed- He also didn't copy this or trace it. Its cropped into the piece and then painted over/adjusted etc. I can tell because of the pixels etc etc.