Comment 5 for bug 1029761

I tested a few things, and noticed that when selecting a restricted name (such as Open, Closed or Easy AI), only the slots that initially had the selected name will be affected.

So, if you select "Closed" as a name, all slots named "Closed" will have the error, while all other slots will be unaffected. Also, if you change another slot to "Closed", it won't get bugged out initially, until another slot gets changed (that "Closed" slot will then become irreversibly bugged out until you change your nick).
Finally, a bugged-out slot will return to its old slot state once you exit, change your name, and host the game again. In case of "Closed" name, if the slot was "Closed" before creating the game, it will be "Closed" after exit and rehosting with proper name. On the other hand, slots set from "Open" to "Closed" and bugged-out, will change back to "Open" after exit and rehosting.

This seems to affect only game modes with other players.