i think they can make whatever restriction they want, even a multiple team one, but you are eliminating opportunities for a user to have a team they want. there are two scenarios i would definitely have been a lot more OK with that don't involve removing the restriction completely:
1) if seble said you could not PICK UP a team within 1000 miles, regardless of division (so coaches who have not been accused of abuse, who have had teams a long time, dont suffer for doing nothing)
2) if seble came out when he made the rule, and made it clear coaches had to drop their teams, and he would hard enforce it - checking for teams in violation with a simple script or something. for that to be acceptable to me, there would need to be some consideration towards a graceful transition - like, you have 6 seasons to move, and then hes going to enforce it - something like that. i wouldnt have been thrilled, neither would some other coaches, but at least expectations would have been set appropriately.
the main issue now is that its unclear if seble would really give up all the users with multiple teams, or multiple teams within 1000 miles (depending which rule he went for), to pacify the guys who complained. seble has overreacted to the comments of a few on a number of occasions, resulting in significant over correction. if seble was going to stand by the rule and make it clear, and enforce it on everyone, at least id go "well, that sucks, but at least i understand". now its like, is seble just pacifying a couple as a means of punting? does he REALLY want to enforce this rule, or just to have the rule so he can get people off his back, and has a mechanism to deal with abuse? that is totally not clear, i think its very possible seble is hoping people mostly just dont get reported, and having a mechanism that only works BECAUSE you dont widely enforce it, well, thats not a mechanism i have any respect for.