There was a debate about including K9 back in 2009/10, and really only one participating user then objected. Since then, our inclusion policy has moved on a bit and now establishes that, generally speaking, as long as the rightful owner(s) of the character have given permission to make the story, and as long as they don't actually say that it's not set in the DWU, then it's assumed to be in the DWU.
The key feature of our inclusion policy is that determinations are made on the basis of known behind-the-scenes facts — not questions of narrative continuity. So, yes, K9 is a nightmare of continuity issues, but then again, so are the John and Gillian comics and plenty of other stories.
To disqualify K9, we'd have to find evidence that the owners said K9 wasn't set in the DWU, or that the BBC have officially objected to the use of characters and situations from Doctor Who that they do own.
Neither has happened with K9.
In fact, Bob Baker, the only living owner of K9, has bent over backwards to say that it is absolutely "Leela's K9". He made the rounds to the Gallifrey One convention a few years back in order to stress the fact that it is connected to the DWU. And the legal inclusion, however briefly, of the BBC-copyrighted design neatly cements that.
Basically, the use of what absolutely appeared to be K9 Mark I in Regeneration was the condition for being able to use K9 Mark IV simultaneously in SJA. So we here at Tardis are stuck covering a four-year-old failed series that none of us are particularly enthusiastic about.