That does allow the user to successfully remove the signature. CC would have to chime on whether that is intended or not, with the control. If I'm not mistaken, the Show Signature control gets its default setting from the profile, then the user is allowed to override that via the checkbox. Technically, that is not a profile edit because the checkbox reverts to the default after that post. They would have to uncheck that for every post in order to effectively remove the signature if their profile is locked.
I find that Custom Titles and/or avatars are a better way to tag problem users. I put in a title of "I Got Banned!" for banned users as opposed to nuking their account.
