According to the following System Center license datasheet it specifies:
"Right to run management server software and supporting SQL Server Runtime (SQL Server Standard Edition)"
http://download.microsoft.com/download/B/4/A/B4A98A4E-2F43-489D-8761-5362C8C2C328/System_Center_2012_R2_Licensing_Datasheet.pdf
For clarification I contacted the Microsoft Licensing help desk and they explained that ONLY the INCLUDED Runtime copy of SQL (which is SQL Standard Edition) is what you are entitled (licensed) to use for System Center.
In other words if you went ahead and downloaded SQL Standard from the Volume Licensing Support Center separately and installed it (for strict use of System Center of course), you would still need to pay for the SQL Standard license.
In order to be in compliance with the license you need to use the specific SQL Server Runtime that comes with the System Center product and not just any SQL Server Standard.
Does this surprise anybody or believe that the person from licensing that I spoke with is mistaken?