We're in! And thoughts on soundscape and derivative work

First of all, we are in! We are a two-person team going for creating an ambient game set on a small, small island. Will you figure out what is going on there? Only if you survive long enough...

We are planning to mix together freely available ambience sound (sea crashing against shores, fire crackling, bird chirping) into a dynamic sound scape where different sounds come and go, and varies with location and actions of player (Saturday morning is the time for grand visions).

We are not 100% certain on what is classified as 'derivative work' though. Specifically, we are looking at the following line in the rules:

"Texture masks, brushes, drums, loops, sampled instruments, and similar assets are allowed, but only if they are used to create a derivative work. i.e. a Song, a complex soundscape, a unique piece of artwork, etc. See below."

Any input on this? Do you think we participate in the 'Audio' category under these conditions?

And last of all, good luck with the jam, to all of you :)