Here's my two cents:

Back when I started this leaderboard, there really wasn't a standard set of rules. The only things I could find related to Castle Crashers speedrunning were the SDA run, Soxdye's runs, and this document by Soxdye: https://docs.google.com/document/d/1LlT1no9YKEP2kY66c0fXYOCY5lcVwwMqPaKgNNoHTQQ/edit Looking back, there were probably some other runs, but because there was no place to post runs, I couldn't find them. Plus they certainly didn't have any standardized rules between them.

So when I had to come up with the categories, I used this note from the document linked above as a starting point: Note: When starting a run you must start at level 1 with no gold or experience. Either a new profile on XBox 360 or clear your Saved Data on Steam. If you don’t your run will be considered NG+ and not NG. Thus that is why NG has to be on the starting knights and without bow, shovel, and boomerang. If you reset your saved data, those requirements are automatically fulfilled. You won't have the bow, shovel, or boomerang, and the only characters unlocked would be starting characters.

As for the SDA's conclusion that different characters don't have enough differences to warrant different categories, I thought that he was talking about only the 4 starting characters.

1. The starting characters only differences are in magic, which isn't used in an optimal run (as stated in the SDA post).
2. I concluded that there was enough of a difference if it was about all characters due to starting weapons. Obviously my opinion matters more ;)
3. You can't be playing any other characters if you reset saved data.
4. Related to 3, the lack of boomerang at the start of the SDA run tells me he reset saved data as well. If you spin it that way, the current NG rules still fit SDA's rule.

As for NG+, I do admit that there are some unnecessary restrictions on the rules I came up. When I was making NG+ rules, there weren't any that I could find (nor could I find a formal NG+ run), so I made the rules what I wanted the NG+ rules to be instead of what they should've been. The main part of the NG+ rules is "Character must have zero exp. earned, must be level one, must have only the bow, the shovel, and the boomerang. You must have the character's default weapon as well as no animal orbs at the start of the run.", which is saying "Reset your character before you start". Why did I make that a rule? Well,

1. If you don't reset, you can just skip all the levels. I mean, you can grind on the first level over and over if you want to avoid that problem, but making that the rule would just deter people.
2. Grinding to level 99 just so you can get the perfect run isn't fun.
3. I just wanted a category where I could play characters other than the starting four and use unlockable items, but not ROFLstomp everything because I was massively over leveled. I mean sure, you can resolve 1 by just making it a rule you have to do all levels in order, 2 shouldn't be a consideration, and 3 can be resolved by making NG like the way you're suggesting, but I wanted to keep NG the way it had been for previous runs. Plus NG+ was made for me at the time, so I didn't do the correct thing, and it stuck.

Regarding changing the rules, I don't think that what I say would matter, considering the most I do for Castle Crashers speedrunning right now is logging in once a couple months and seeing what's happening. But if it was me personally, I'd leave it as it is, and make a separate extra-leveled category.

Some extra side notes:

1. Ban the full moon skip. I decided to merge the skip & skipless categories despite what Soxdye's guide said, just because realistically very few people can actually do the skip.

2. Also, GameGuy, boomerang useless? Then explain this (at 4:45) :