There's been quite a bit of discussion on the right ruleset for MKX. On the variation lock question - I strongly believe it is better to allow the winner to change character variation. I would propose a counter pick procedure that involves:
1. Winner stays with current character
2. Loser picks character
3. Winner picks variation
4. Loser picks variation
This is similar in spirit to rules in a number of other games with variation-esque mechanics. I'm not a well known player in the community, but have given this a fair bit of thought so I hope it's considered. Here's the rationale:
Overarching principles:
1. The goal of any competitive rule set is to promote an environment where the best player wins.
2. As long as there are matchups that are not 5-5, there can be games when character selection rather than player skill determines the winner.
Explicit goal in determining the variation lock rule
Get as close as possible to a tournament where all games feature 5-5 matchups. This promotes the principles above and also increases hype (I think we can all agree that some of the least interesting matches to watch are 7-3 counter pick matches like when Forever King counter picks 16 Bit's Catwoman with Aquaman).
Why allowing variation switches promotes this goal
Simply put, it's harder to counterpick your opponent with a 7-3 matchup when you don't know who they are picking. Having the loser pick variation after the winner ensures that the loser doesn't end up getting counter-counterpicked and ends up playing a disadvantageous matchup anyway (provided the loser has a little bit of foresight and considers the winners variation choices before he selects character).
I believe the traditional counter picking procedure is flawed
Some may argue that different variations might as well be entirely different characters in some cases, so we should use standard counterpicking rules (winner changes nothing) as a result. However, that assumes that standard rules are optimal, which they aren't. They still result in terribly boring lopsided matchups like the one I mentioned above.
The traditional procedure is good in situations like this: Lex player goes to a tournament and meets a Sinestro round 1. Without counter picking, he's all but lost at the character select screen. By counter picking he increases the chance that player skill determines the winner rather than character choice. I'd argue counter picking is a bad thing in a situation likes this: Catwoman player plays a Batgirl player round one and wins the first game because the Catwoman player is better. Batgirl player counterpicks aquaman and takes the rest of the set, despite being a worse player. In this case, player skill is not determining the winner - character choice is.
If we can preserve the first thing and reduce the second one, I think that's a good outcome, as unintuitive as this suggestion may feel. The standard procedure (winner locks everything) is all we can do in MK9 and injustice because there are no variations, but here we have another choice and we should take advantage of it, increase the number of 5-5 matchups, and make it so the better player wins more consistently.
If folks disagree, let me know why. Preferably, address which of the principles you think is wrong. Or tell me why this rule doesn't promote those principles. If you can't do either, you probably don't have a legitimate objection.