I don't know why the Beatles allowed them a spot on an album but they did.
I think John’s quote was “they’ll be good enough for the movie” they had to find songs for Yellow Submarine which at that stage they had no interest in. That changed when they saw it turned out well.
I think George Martin, referring to all four of the not previously released Beatle songs on YS, said something like they were scraping the bottom of the barrel.
