Gm. Today I'm going to stir up discussion that may seem crazy at first, but I think has a lot of merit. If you've never considered this as a real possibility before, try to read this with an open mind. The TL;DR is
we should test a Tera Banned Lugia in SV Draft.
Yes, the perennial Uber that, as far as I'm aware, has never been seriously allowed in a non-Ubers draft setting, but Gen 9 has changed a lot for the mon. Pretty much every Gen 9 mechanic/movepool update has made Lugia worse to the point when I'm not even convinced it would be a top 5 mon on the board if it were freed.
First, the direct nerfs Lugia got this gen: It no longer has access to Thunder Wave, Toxic, or Defog. This already makes it worse as a utility mon, but the bigger deal is that without Toxic, bulky Lugia sets lack a consistent way to make progress. It doesn't have any pivoting moves, Knock Off, or hazards, so all it can do utility wise is Whirlwind/set up screens.
There's also some indirect nerfs, like Recover PP being halved is just a strict downgrade that hurts Lugia's staying power. There's also the lack of hazard removal, and for a rocks-weak mon like Lugia that is also weak to Knock Off, this can make it inconsistent in a defensive wall role.
Obviously, though, Lugia doesn't have to be a do-nothing fat mon. It's got access to Calm Mind and it's a fairly potent setup sweeper. It can even use Weakness Policy combined with Multiscale and its many weaknesses to boost further. CM is the main reason I see that Lugia has never been allowed, but the SV meta is more than equipped to deal with it. This is mainly due to the wide distribution of Encore. Lugia does have high Speed, but it's not fast enough to outpace Encore users like Iron Valiant and Iron Bundle. Lugia also isn't strong enough for slow Encore to not be an option either. Additionally, I would say the majority of builds already have an Encore user on their team since it's a consistent form of counterplay vs Tera Captains.
Speaking of Tera, that's another major drawback for a Tera Banned Lugia. Lugia's STAB combo is walled by Steel-types, and its best way of hitting Steels is with a non-STAB 90 base Attack/Sp. Attack Earthquake/Earth Power. This is pitifully weak, which means Tera Steel mons could exploit it pretty easily. It also doesn't have ANY super effective coverage vs Dark-types, so it's forced to rely on Aeroblast on them. Aeroblast is a good move, but it's nothing crazy for Gen 9 standards.
I've only talked about typical Lugia sets that you would see on the Ubers ladder, but this is Draft, and Lugia must have a bunch of tricks up its sleeve to find something that breaks it, right? Well, uh, I've been looking, and I just can't see it. It doesn't have access to Stored Power or a means of boosting speed besides Scale Shot. Most of its movepool is just coverage options that won't be that strong off 90 offenses and without STAB.
Okay, so, we've now established how Lugia is a lot worse this generation. We now must ask ourselves the question: why would we even want to go through the effort of legalizing a tera banned Lugia? Well, I think it has two traits that could be healthy additions to the meta:
1. It's a very strong mon into hyper offense. SV is the most offense-heavy draft generation we've ever seen, with balance builds becoming pretty much unviable. Lugia provides another much-needed defensive glue mon to support bulkier builds. It lost most of its utility as I already said, but it is a very good stopgap Pokemon with Multiscale + Whirlwind.
2. The 110 Speed tier. Ever since Ogerpon was added to SV, 110 has been one of the most important speed tiers in the meta, and there aren't that many non-Ogerpon viable options at or slightly above this speed tier. Lugia would be another option to to fill this important speed tier for draft teams, which would be very appreciated to help diversify team structures.
There are definitely counterarguments against allowing Lugia. Maybe it ends up being too bulky in practice and shuts down too many offensive structures, or maybe I'm underestimating its Calm Mind sets since Toxic is also not widely distributed anymore. It's never been allowed before, so it could just be a lot better in practice than I currently see on paper. Because of this, I would err on the side of caution and legalize a tera-banned Lugia at 19/18 points and see how it performs. If it's too much, then it can just go back to the ban list. If it isn't, though, then I think it could be a legitimately healthy addition to the meta.
I made this post mostly to stir up some discussion since it'll be a while before a new Smogon SV tour starts with an updated draft board. Maybe a league or something that's starting up soon could test it out in the meantime. If not, though, I will return to advocate for a Lugia test in the next winter seasonal.