I personally after reading the report think that there is a leak there, I do not agree that it goes to “just about same” even if it does not go to hundreds of mb in their 50 iteration then the leak shows almost 1/3 memory increase.
On Graphics.Pixel (someone correct me if I am wrong) then I have always understood it that it was deprecated since pixel operation does not belong in scalable vector context. Since a point in vector form has no meaning. However a FillRectangle with Width and Height of 1 has meaning in the vector world. So if graphics has scale mode then it knows exactly what to do with it since it was Vector box of 1 x 1.
Given that and if my understanding is correct there then your substitute should be FillRectangle.