So you have a warning when you first join the server or when it's first enabled. That seems perfectly reasonable to me. If I'm shelling out 30$ a month to host a server, don't you think it'd be nice if I could decide if transformations are allowed/disallowed? Sure, it may not be fair to the guy who wants to transform, but its also not fair to me, who wants to play untransformed and fight people untransformed.
The fact is the team has added a lot of cvars that changed game play drastically; they shouldn't reject this idea because it may do the same. Take the simple melee cvar for instance. If a person who loves advanced melee goes into a server and finds out that the simple melee cvar is on, it's the same exact thing as if the person goes into a server and finds out he can't transform. The team still added that cvar however, just as they should still add this one.
And again, Buu dominating the server is brought up. I'm sorry, but that is a horrible reason to reject this idea. The game already is unbalanced, one little cvar won't change things that much. Worst case scenario, we have what we have now where everyone is a certain character (everyone currently plays Goku). If you're scared of one person dominating the server, here's news: That happens everytime you play ESF. If you go into a server, you'll find one person with a score of around 120 and 2 and then everyone else with a score of 5 and 40.
The point I'm trying to get across is that I'm suggesting a cvar. It doesn't have to be perfectly balanced, its purpose would be for people who just want to hang out in a server and duel.