the rules seem fine- and as long as people have fun I would not worry too much about the minutia- its not like one WINS anything other than fixing up a unused bike with cheap or free parts. I started mine in the other thread and I am trying to only use parts I found on the side of the road or the trash.. or some i got off "freecycle". this includes down to the tires & tubes, cables, housing etc. it made me convert the rear wheel to a disk brake (its a vintage disk brake!) just because that was the only rear wheel I had that was free.. and had a usable tube - something I would never have done if I was not trying to make the cheapest build possible.
the frame and some parts hanging on it was $25 - and i took some parts off for another bike. but I am happy to call it a $25 start and try and ride those dollars off!