I'm actually not sure. I don't deduct it. I'll rather have the gymnast pick a wedgie than compete with their butt hanging out. I've spoken to coaches/gymnasts once or twice about getting the right sized leo though.
In my region judges deduct for picking wedgies. If you as a judge like it or not, we are even expected to do so by the chair of judges, same for e.g. fixing your hair during a routine.
It is a 0,3 penalty for behavior related violations from the final score.
I am not sure of the exact reason: incorrect attire or other undisciplined behavior - both is 0,3 from the final score, so it does not really matter.
Code of Points, Section 2: Regulations for Gymnasts
(...)
2.3.2 Competition Attire
a) They must wear a correct sportive non transparent leotard or unitard (one piece leotard with full length legs-hip to ankle), which must be of elegant design. She may wear complete leg coverings of the same color as that of the leotard; under or on top of the leotard.
b) The neckline of the front and back of the leotard/unitard must be proper, that is no further than half of the sternum and no further than the lower line of the shoulder blades. Leotards/unitards may be with or without sleeves; shoulder strap width must be minimum 2 cm.
c) The leg cut of the leotard may not extend beyond the hip bone (maximum). The leotard leg length cannot exceed the horizontal line around the leg, delineated by no more than 2 cm below the base of the buttocks.
Our club has extremely high-cut leotards, so my teammates and I apply tons of “butt-glue”. Is is actually a roll-on glue for medical compression stockings, but it works great. You can be sure that your leo stays in place, I would never compete without it.
I feel like there are lots of good reasons for and against wearing shorts, long sleeved, tank leos and crop tops. It is not really a big deal at my club. In training gymnasts are allowed to wear everything, as long as it fits (event tight t-shirts and vests) and you can be spotted safely. Most girls prefer tank leos with shorts.
For competitions, wearing the long sleeved competition leo is an acknowledgement. Coaches are like “you worked hard, now you are allowed to put on the team leo, it is time to go out and sparkle on the competition floor, be confident and show them that you are the best”.
So in this situation, it is like a treat and I personally feel that there is no reason to feel uncomfortable.