The ARB (as quoted so many times):
This choice can be vetoed by your game’s
Plot Committee if it is inappropriate, and other
Alliance games have the right to refuse your
character’s skills if they are not reasonable.
It does not state that they can refuse your character card.
1) We're in agreement that the ARB does not state they can refuse your card. However, the ARB does not state you can play with a portion card either. So, what does it mean to have your skills refused? Does it mean they simply aren't on your card? Does that mean those build points are floating in some weird void? Does it mean you can temporarily spend those build in something else? Who knows?
I interpret that refusing the skills without authorizing an alteration means the card can't be played. But I -could- be wrong on that, but I wouldn't accept the ARC ruling or the ARB as evidence of this, because they don't actually state that a person can play with an incomplete card.
And per ARC:
While ARC prefers that this happen as little as possible, Plot has the ability to temporarily alter a card for any number of reasons if they choose to do so. In a case like this the effects should not continue past the end of an event. In general, ARC encourages plot teams to consider maintaining a significant deference to the original chapter's determination of acceptable skills so as to avoid issues like this.
Again, not stating that they would refuse the character outright just the skills.
Ultimately though as the above which is underlined: ARC encourages plot teams to consider maintaining a significant deference to the original chapter's determination of acceptable skills.
Therefore, a racial prof SHOULD not be denied, therefore, the problem is moot.
2) ARC's encouragement doesn't mean ARC requires. ARC's actually stating that Plot can -totally- deny that Racial Prof on your Butterflykyn, they would just rather prefer that Plot didn't do that. So yeah, that Racial Prof shouldn't be denied...but it totally could be. So the problem isn't moot at all. It's still a problem. Example:
Billy Goodguy approves a Arctic Rabbitkyn, because Rabbitkyn are believable, so he says "Good to go!" on that Resist Element. The character travels to Chapter Bananas, and in Chapter Bananas, Jimmy Badguy, Head of Plot, says, "No, that's stupid. I'm refusing those skills. No Resist Element for you!" But no alteration to the card is authorized either, because Jimmy thinks that an Arctic Rabbitkyn is just dumb, regardless of what skills it might have.
So, what happens to the card? I don't think it can just have a weird blank space where those skills should be. Maybe it turns into refunded build points for that event, or maybe it doesn't, but neither ARC nor ARB state what happens. So I interpret that as character refusal.
If you want, we can ARC that specific inquiry.