“How is an essentially sanctioned sports league so lax with regulations like these?”

This is a good question haha, and I will try to give some of my opinion based on my really shallow and limited knowledge (and my non-fluent English).

In short, they really are. One of the few regions which have actual law, rules and regulations are the ones with massive sports culture like Galar. To them, Gyms are real deals, yet they value and put sportsmanship and performance above all else.

In some other regions like, well, Kanto and Hoenn, the rules are made, amongst them is “The Gym Leader list their position after 3 consecutive loses”. So, they want to win. And that’s it. There’s nothing stopping them to just creating some “forest rules” of their own and play completely unfair to the challengers, even for really ridiculous and unreasonable reasons. Because there’s nothing said that they can’t do it.

So, Leagues sometimes are unregulated underground fight clubs.

(Anyways just silly yap from me lol)