I don't see why they wouldn't be allowed. The starter pokemon (and their evolved forms) are a large part of the trainers relationship in the games. Especially considering this is a Rivalry Rumble, the whole "Blue picks the starter that has the type advantage over Red" is highly representative of the Rivalry, heck you could even say it's the biggest factor in this regard.
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Above all things, If kindness is your king, then heaven will be yours, before you meet your end.