Since in this game your handle is also your characters name and we try to keep as RP-centric as possible, we need admin approval for names to prevent the typical online names like xxxLoverxxx etc that are just stupid. Since admins are volunteers like everyone here, it might take a few hours for them to get online and approve the names.
As for an algorithm, because your character name is how we identify you when sending stuff etc, changing names because the algorithm let in a bad name is a massive hassle.
Algorithms would usually have problems declining names if it was another version of Luke skywalker, say Luke Skiewokker or somesuch. And it couldnt pick up on a lot of the foreign language profanities and other puns that people have submitted. And the way this game works, I think the handle acceptance queue is really a mirror of how this game works in general with the time delays. you have to wait for everything, so if new players cant get past their first hurdle they likely wont last long anyway.