Rules for 20 September 2003
A rules digest from the L5R CCG rules team, copied from the mailing list archive for Oracle of the Void. The askers' names are left out. Rulings are as they stood on this date; later rulings, the rulebooks and the Rules Archive may differ.
Would this mean a shadowlands player cannot refuse Iajutsu Challenges?
No. You have to look at each card on a case by case basis. For Iaijutsu Challenge, honor loss is an effect.
If its because of the "This loss cannot be modified" clause, than can a shadowlands player use the second ability on Oracle of the Void?
It's not because of that clause, so a Shadowlands player can use it.