I'll try to explain.
Say you have a designer who is making a cool Forest-themed level. Then a LDC comes out and the theme is Forest. The designer really wants to enter an LDC and show what they can do. But the designer can't use the level they've already made for the LDC, because that's against the rules, and it's too hard to make two completely original forest levels in a row. This is frustrating, and they'll probably end up not making a level for the LDC, and might even be discouraged from finishing the original level. Later, the designer might think, "I'm gonna make a cool Desert-themed level!" But they'll remember what happened in the Forest LDC, and be worried that a Desert-themed LDC is coming next. So, they'll put off making a Desert level until there is a Desert LDC, which then never happens. Thus no levels are made, no contests are entered, and one designer is very unhappy.
Speaking of unhappy designers, I really need to start working on a level...












