I imagine he'd at least give out a warning, provided he hasn't already, but it is definitely surprising. I'm pretty sure I've seen him warn people for less explicit avatars, even though they were censored similarly.
LoL.... I don't think this Competition is worth it. Primarily because the the only objective seems to be who can be the Lewdiest..... You should add a New Category..... like who can be the Lewdiest while still being the most Tasteful. Just a Suggestion.