From the Battle Fourm Rules v2.0:
Joke Battles- Non-serious matches that are allowed provided they don't get posted too frequently. Rules on banned characters (except religious gods) will be relaxed for these types of matches.
@takashichea: I just checked the rules. It didn't state that Verse Battles won't be relaxed for Joke Battles. The thread in question WAS a joke battle, but why it was locked was because things were way too rowdy in there, especially when (who might be) Mr. Suggs showed up.