Why Zerodha doesn't allow Intra trading in F&O script which are in ban period?

Intra trading would not increase OI and thus there would be no negative consequences. For Banned scripts Zerodha could add a mechanism similar to MIS AutoSquare off, where script would be AutoSquared off at 3 PM, thus will not result in overnight position.

Hi Sahil,

A derivative contract enters ban period if the total open position exceeds 95% of the open interest, and as you know this rule has been set by the exchange, now when clients place an order a position is created be it on intraday or on carry forward, the reason it has entered the ban also could be attributed to increase in speculation on that day , as a SEBI registered broker Zerodha or any other broker in India would and should not allow that.

This is what NSE says on their site