Alright, so I was asked by Jay to check this. The first thing I'll address is Gutsy saying that Jay wouldn't be able to use the Artificial Mist because it mentions seals. However, Jay's usage is indeed valid. I ran into a similar issue when I used a Kiri VCJ to create a barrier back in the first Headhunter Games. Because the technique was approved as a village Ninjutsu before Fuuin was fleshed out in the RP, it would count as Ninjutsu, so I was able to use it without Fuuin. Given that this jutsu was approved in the same time period, I'd imagine Lord of Kaos' ruling would apply to this as well. Furthermore, Gutsy already let the move go through, so it's too late now either way.
Now, we have the issue of whether or not Gutsy's sensing would apply to the technique coming at him. Let's look at the wording of the sensing as it is in the approved clan's submission.
With this would could sense anything with the intent to harm, destroy, kill, anything that isn't seen as pure. So for example earth spikes would be used to kill through nature, you'd be able to sense this where as a earthen shield you would't be able to sense as there is no harmful or evil intent behind this
As I highlighted in bold, the approved wording of the clan does allow it to sense jutsu that are made to harm the user. The wording is rather nonsense, given that the intent is defined before as sensing "anything with killing intent," and inanimate techniques can't have killing intent, but that's how it was approved.
Now, there's the issue of whether or not Jay's jutsu will affect the intent sensory. Well, as before, let's go back to the wording of the approved submission.
Neither user nor opponent can see or sense each other ( via methods other than the creation of this mist ) - even usages of other Chakra Sensing abilities will be distorted because of the chakra present in the mist itself.
The jutsu clearly states that while it's active, no methods of sensory aside from the creation of jutsu will work. It does not solely say chakra sensing won't work, it says "even chakra sensing."
And it's now time for everyone's favorite game: Semantics! The keystone to every issue. If I say to you "You are not allowed to drink alcohol. Even rum is forbidden." Am I saying here that rum is the only alcohol you cannot drink? Nope, by the same measure, the technique saying "even chakra sensing won't work" doesn't mean "only chakra sensing won't work."
Gutsy mentions in VMs that it's illogical for chakra blanketing the mist to block sensing of killing intent. Well, not only does the technique not say this is how all sensory is blocked, this also brings me back to my note about the Noldor wording. It's illogical to be able to sense a jutsu per the clan submission's wording, but that's how it was approved, so that are the effects it'll have. The same applies to the mist. If I were to rule that the mist's approved effect doesn't work because the wording is illogical, I'd have to do the same thing for the Noldor sensing, and say it can't sense jutsu despite it being approved with that effect.
I have to rule that the sensing fails in order to avoid hypocrisy, and since the sensing acts as the basis for Gutsy's defense, his attempt to counter would fail, resulting in Jay's win.