The old characters that were up on the site were often sparkle and/or unrealistic in some other way (extinct or made-up species, fantasy themes) or sometimes without a bio at all ("bio coming soon" since 2010...) and like Draco said these things are not allowed anymore. It's still possible that some of them are still active on sites that had many characters like TLK or Balto source, so if you see any - they should be reported.

If they're reported, then yes, they will be deactivated.

But what would have happened if they hadn't deleted their characters? Would they have all their characters deactived because of the new rule?

Just adding to Troll's answer, sparkle characters are not longer allowed, so you won't find any around the sources any longer. Unrealistic designs are, but no obnoxiously bright unnatural coloring are.

They were either deactivated or deleted by creators.