I was in DannyB's stream, and a discussion came up about if it is allowed or not. What's the verdict?

the rules say
-Memfiles, warps, inventory editing, and any other functions may be used to set up your file and to reset between attempts.
-During actual IL gameplay, no practice rom functionality may be used. For example, no cheats, no visible menus or displays, of course no macros, etc.

so you can use it, but just for like loading a savestate before entering the dungeon