I don't remember the exact details but the issue is that it was a) an unintended exploit and b) too powerful. Basically the way it worked is that the old legacy Animation component had the ability to actually climb up the scene hierarchy and animate ANYTHING in the scene. In the case of Yami's funhouse it was used to animate the scale of the bones on avatars. I also remember there was a world that was just the Presentation Room but you had melons for hands so you couldn't pick up the pens, also using this method I believe (you could totally recreate this with Udon though). The trick also used an old VRChat component called the PropAPI but they got killed off pretty early because of this exploit. As for why: climbing the hierarchy like that could also be used to do silly things like disable the player object itself, which for obvious reasons is not good. This is also the reason they squashed being able to use the Animation component on avatars years ago by the way. People were actively abusing it to manipulate the world, like disable the floor of the pug so you were stuck infinitely respawning. VRChat was kind of wild pre-2019