We only allow runs starting from a savestate if it is the only option to access the particular feature that the run uses. For example,
Super Mario Land "hard mode" is allowed to start from a savestate because SML doesn't have saves, and hard mode requires beating the game and immediately continuing into hard mode from there. This is because we can't really verify the legitimacy of a savestate by itself. A state could appear completely legitimate, but it could have been created through illegitimate means, and theoretically it would be near impossible to tell.
Time Challenge mode in this game requires beating the game twice, once on Normal mode and again on the unlocked Director's Cut mode. In this case, we'd require a separate verification movie that beats the game twice in order to set up the save file, and this run would have to start from reset using that save file. VBA supports doing this, and while we don't exactly recommend using VBA anymore (it's severely outdated, inaccurate, and unsupported), the fact that it supports starting from SRAM at all means that a savestate should not be used for this run.