Here's my $.02.
I "think" they don't want Velcro used, but the clarification seems to only apply to the modification to the rope to prevent fraying.
Quote:
Community members are innovative and
may discover a way to fuse the end of the ROPE in a way that can be
leveraged for competitive advantage. This “superfusion” extends the
fusing’s purpose beyond only preventing fraying.
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So as it stands currently, if you have a strap of Velcro that satisfied the definition for rope, I think that would still be legal since you didn't modify it. I just expect that they'll address that in the next update. So be careful about betting on Velcro as rope.