If the site has open membership - i.e. anyone can apply to be a member - then, yes, that is considered public, even if only 20 people actually saw it.
The WiP clause is a way to encourage good older ideas to be finished in a BLU way. If all someone has to do is write the last few chapters of a fic they've been posting forever, or posted almost in total, that's not really in the spirit of the project.
I'm excited, too! I hope you'll be signing up! If you want to go into detail about this fic on another site, feel free to send me a note at the community email and we can discuss. *HUGS*