Generative Artificial Intelligence's (GenAI) impact on Human-Computer Interaction (HCI) education and technology design is pervasive but poorly understood. This study examines how graduate students in an applied HCI course utilized GenAI tools across various stages of interactive device design. Although the course policy neither explicitly encouraged nor prohibited using GenAI, students independently integrated these tools into their work. Through conducting 12 post-class group interviews, we reveal the dual nature of GenAI: while it stimulates creativity and accelerates design iterations, it also raises concerns about shallow learning and over-reliance. Our findings indicate that GenAI's benefits are most pronounced in the Execution phase of the design process, particularly for rapid prototyping and ideation. In contrast, its use in the Discover phase and design reflection may compromise depth. This study underscores the complex role of GenAI in HCI education and offers recommendations for curriculum improvements to better prepare future designers for effectively integrating GenAI into their creative processes.
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