Without commenting on whether an LLM is the right approach, I don't think this task is particularly hard to audit. There is almost assuredly a huge test suite for bzip2 archives; fuzzing file formats is very easy; and you can restrict / audit the use of unsafe by the translator.
I suspect attempting to debug it would be a nightmare though. Given the LLM could hallucinate anything anywhere you’d likely waste a ton of time.
I suspect it would be faster to just try and write a new implementation based on the spec and debug that against the test suite. You’d likely be closer.
In fact, since they used c2rust, they had a perfectly working version from the start. From there they just had to clean up the Rust code and make sure it didn’t break anything. Clearly the best of the three options.
https://github.com/immunant/c2rust reportedly works pretty well. Blog post from a few years ago of them transpiling quake3 to rust: https://immunant.com/blog/2020/01/quake3/. The rust produced ain't pretty, but you can then start cleaning it up and making it more "rusty"