There are all sorts of banned things for custom license plates—mostly around potentially offensive or religious subjects. My point is that they’ve always been heavily and somewhat arbitrarily restricted. In high school a friend with the last name Flickinger wanted “Flick” as a custom tag but it wasn’t allowed because in all caps “FLICK” looks too much like “FUCK” from a distance. ¯\_(ツ)_/¯
No reason not to forbid NULL as well, and it’s probably a faster solution than finding a way to address the underlying problems with their system.
If we were talking about a problem actually recording someone’s name in some necessary infrastructure, sure, you can’t and shouldn’t prevent someone from having “Null” as some part of their name. Vanity plates are a luxury, and I favor the expedient solution. No one’s rights are being infringed.