Well, Dzegeris, you've just discovered one of my raw nerves, so...
*Timid gets up on a soap box*
About CAPS
I can't speak for Skyblock, but in KC1, there's always been a rule about not using excessive caps. But almost every admin or mod will give warnings for even one word in capitols. They seem to completely ignore the operative word, "excessive". I fully believe that the heart of this rule is meant to prevent people from typing entire paragraphs in CAPS, because on the Internet, we've taken CAPS to equate to shouting. I do not believe that "HELLO GUYS!" should be a warnable offense.
The real problem, tho, is that we are punishing people for unwritten rules. If I see a rule that says "No excessive caps", it's reasonable that I should expect to be allowed less, non-excessive caps. As far as I'm concerned, it's dishonest, mean-spirited, and rude.
During the Era of He Who Shall Not Be Named, people were getting warned and muted for the most minor of "foul" language when no such rule even existed, and for using words like swag, and yolo.
About Swearing
While I will agree that damn is not a cuss word (they can say it on prime TV and on kids shows like The Simpsons), and also while I understand your issue about swearing in local chat on your island, the fact of the matter is, swearing is against the rules. There is not distinction between what channel you're in.
One thing to remember, in Skyblock, it's still possible for you to have other people on your island who would then be subjected to your language, and also people on near-by islands can also hear your local chat. So that's one good reasoning as to why you can't cuss even on your own island.