Aren't the battles basically augmented reality in this show? The arenas seems to scan the Gundam models and then give them attributes according to the scan results (so that something that looks like a rifle would shoot a beam or a missile would get propulsion and a working warhead). Other than that, it seems to me the system also rewards innovative modding, like unusual building materials, although that might be partially related to how the stuff reacts with plavsky particles. So, basically anything should be able to happen, but some things might be removed/limited for the sake of fair play. Aside from the movements of the physical models, it's all an illusion, after all.