In my opinion, I don't think that Epic would care.. it's just a model, and if it's being used in THEIR game anyway, what's the harm?

I mean, Sega didn't care when they made a Sonic model for Quake 3, and they never made the game (although they make sonic appear in almost every game they make.)

Anyway, if it's not too much trouble, I'm sure Noogy or someone else in the Jazz community could add the proper animations to the Jazz model, or possibly make an updated version with a higher number of Polys.