I doubt the CMOS is only 2 bits, otherwise we wouldn't have such nice dithering pattern.
Somewhere in RAM there's probably at one point a representation of the image with at least 3 bits per pixel.
Looks like the maximum supported exposure time is ~1 second... That mixed with the fact that the fact that it has a fairly shallow well depth probably means that the CMOS would be best suited for LUCKY imaging. Also adding a cooler to the back of the Gameboy camera may help reduce amp glow. Anyone have the specs on the ADC chip?
It's an analog output. You can very easily add an ADC to get higher bits per pixel and bypass the whole digital Gameboy interface. I did this once when the game boy camera was about the cheapest digital camera available. I even converted it to color by taking successive photos with colored filters and combining them in software.
Curiously, the camera has hardware edge detection which might have helped with very early machine vision.