I am more concerned that LJ is opening a can of worms it really doesn't need to open. If they are really going to say all underage fanfic and fan art is child porn... then they have to be able to enforce it. Because once you take that stance, if some kid finds "when harry was sucked off by snape" and tells his or her mom, LJ is now liable for NOT enforcing the child porn ban.
Mind you - a lawyer would make mincemeat of such a claim but we do live in a country that is pro-nuisance lawsuit!