They’re using the 990512 (in YYMMDD format) version of the game. This is the initial release that has several bugs, such as unblockables (Urien’s is most known). It also has Yang’s erroneous “Magnetic Storm” Super Art when on Player 2 side.
There’s also [media=youtube]qe5NpmHtw5k[/media] that shows up when Ken finishes Makoto with his neutral throw (the knee bash). It causes some kind of strange error (I hear it’s a misaligned address) and crashes the game. MAME, CPX3 and CPS3Emu do not reproduce this glitch faithfully.
The 990608 revision fixes all these bugs. However, since the [redacted] players refuse to play any version without these unblockables, this rule’s necessary.
CPS2 and CPS3 games come ‘pre-translated’ so that it can be launched worldwide. This is why MAME and other emulators can change the region on these games so easily. All it does is change what region the main board returns when it’s queried. It doesn’t do name changes in some instances, but you will get English text in the game if you run a Japanese ROMset (or B board) on a US A board or emulator set to US.
The results vary, if the game doesn’t freeze. bolt9289 explained one example, another is she will be stuck in one frame while falling to the ground. Probably the more recognizable one is shown in SlimX’s 4th 3S video where she will get stuck in one frame for a few seconds, then move to another while still in the air after a few seconds later, then drop after another few seconds.
It’s a weird glitch that’s not worth doing, unless you have a cabinet at home and wanna show your friends something funny/stupid.
It’s a widely recognized ban in Japanese tournaments because the standard is Old Type.