Yes, it's bad. Bunnies need shelter, can get very sick if they get wet without a good place to dry off ... just not a good or healthy situation for them. If she "hates the smell of a wet bunny" it's probably because the cages are not cleaned enough - as bunnies don't smell if they are clean, and rabbits prefer to be clean. So it is absolutely neglect.

That's not even adressing the emotional needs of a bunny, the lack of socialization and interaction ...

Animal Control doesn't care about that part usually, but neglect is abuse.