Yeah... as much as I hoped for a smaller penalty, I know well enough that illegal decks don't count as wins.
Though, to make it clear, from my observation edunavas simply didn't know that the first post is official. He used the deck he posted on the n-th page of our deckbuilding thread where he stated it was his final, tweaked and tested version of the deck... and later we changed the deck a bit due to deflags being needed elsewhere. I posted in the deckbuilding thread the changes I've made, but it seems edunavas didn't notice or remember that. And it's my fault I didn't make sure he understands that the first post is official.
So, as much as it changes nothing in accordance to penalty, he didn't "adjust it as he saw fit." and it was unintentional. At least that's what I deduce from our deckbuilding discussion and our discussion with him after I spotted the problem.
As for deflags, they were taken mostly to counter possible arsenics, nightfalls or boneyards. So I'm not sure whether RPs or Deflags would be better in this duel... but it's a sad turn of events, since our deck seems like a good counter. The single Xuru's win was due to an extremely good draw I witnessed in spectate.