I really don't see what the big deal is....
Un-started kit doesn't have to be sealed when you start, how many of us don't take the parts out and fondle them, then put all the parts back in the box, and the box goes on the shelf with the umpteen others until we are ready to build it. Everybody does that, and that DOES NOT constitute a started kit.
Most tank kits come with the upper and lower hull as a separate piece, and not attached to a sprue, if you took those parts out to see how well they fit together, and then put them back in the box, that DOES NOT constitute a started kit, as you never clipped the parts off the sprue.
If you however take that same kit, tape the upper and lower hull together, clipped off the main turret parts, taped them together, and placed it on the hull to see how it all fits....then YES, that is a started kit.
If you clipped the 2 halves of an airplane fuselage from the sprue, and taped them together to check the alignment, then YES this is a started kit.
The purpose is to make it an even playing field for everyone for the regular categories....an UN-STARTED kit is an UN-STARTED kit....this isn't rocket science, if all else fails refer to your common sense.
As Ken said, it is all on the honor system, we aren't going to be worried about the odd part that fell off the sprue in shipping, but if the kit looks to be blatantly started, it is going to be DQed for the regular categories, but could still be entered into Everything Else.
As far as the number of kits you can enter, I don't believe there is a limit, pay your $5 per entry, and enter as many as you like. So if you want to flood the Everything Else Category with kits you have finished in the past, pay your $5 a kit and fill your boots, however I don't think that is the vision that Scott saw for that category, as I believe it was created for those that have builds partially started, that don't want to start something new because of all of the "in progress" kits they already have on the go.
No cross entering in categories, IE: if you built a Mad Max Car for the Aftermath category, it CAN NOT also be entered into the Automotive category.