The actual Truth about Taunt Parties:
When they started...
Taunt Parties started during the introduction to the Online Mode when Brawl was released. I rarely played Online during Brawl; however if I remember correctly the lag was often horrible no matter what kind of connection you had. All it had was "Basic Brawl", "Team Brawl", and "Spectator Mode". Both battle modes were 4-player and since the lag was so insufferable people created Taunt Parties to keep themselves entertained, since that's all you really could do in said lag. Brawls Online was treated as a joke.
Of course, it allowed you to Smash with friends too; however there was no point in doing Taunt Parties with friends because the connection was often much better depending on you and your friends connection. You could actually ya know, Smash for once.
Why are they still here...?
I honestly don't know how to really respond to this. I don't have an actual answer why Taunt Parties carried over despite the connection being improved (there's still some lag at times, but it's not as bad as Brawls). The only answer I can give is probably because people grew used to them and it just became one of those "Things" to do Online. Every Online game has it's "Thing".
Taunt Parties just happen to be Smash's thing I suppose. It's existed since Brawl and will probably carry over to the next game, too.
Why do people even find them enjoyable...?!
I guess a lot of folks just find joy in goofing off? Not everyone takes the game seriously, and if you're someone that goes into For Glory often (like me) you sometimes you just need a break from playing seriously. Taunt Parties aren't for everyone and they can be very boring to some. After all, a lot of you play the game so you can actually Smash, right? I don't blame folks for hating them.
Everyone has their own definition of fun though, and not matter how much you try to fight against it there's just no stopping them. Even the Report Function that was made for Smash U/3DS is obviously not stopping them. There's just not much you can really do.
Why does it always seem like a 3V1 every time I come in...?
If you enter a Taunt Party and see someone getting tag teamed they probably did something to "Crash" the party.
"Crashing" the party often means you tried to actually fight. Since there's no communication with players people can't just tell someone to "Back off, I got this". Everyone feels compelled to get involved even when they don't need to be. Sometimes some folks will stay out of it and do their own thing, and just let one person handle it. Not everyone has an interest in ganging up on a single person. The most likely reason they gang up is someone is trying to attack them all and they just want the person to leave.
People just want to do their own things when Taunt Parties happen, and they will typically try to get rid of Crashers by 3V1.
But I didn't do anything wrong, so why am I getting attacked...?!
People participating in Taunt Parties don't just attack to be mean. From my experience the person often brings it on themselves.
Let's say you're Pikachu, and you're doing nothing but his Neutral B. You aren't meaning to hit anyone, but you are. And you're hitting them A LOT. Whether it's accidental people will get sick of it. Sometimes some folks will go up to you and grab you, or often try to hit you with an attack of their own. Do not panic when this happens. Just ignore them or run if you have to. If you start another game don't do anything, then they won't have a reason to go after you. If you see it as a threat and act, they will act too.
One example of this is one time somebody was playing Jigglypuff and doing rest. They then started resting other people. Sometimes it was an accident and other times it just felt on purpose. Mistakes can happen, but they kept managing to hit others with it and KOing them occasionally (even in Sudden Death). They got sick of it and started to attack the Jigglypuff due to it.
They may not of meant it but at the same time they refused to stop. Most aren't going to continue to ignore that.
But I still didn't do anything, yet they're trying to KO me...!
Did you attack them in any way, and them give them damage?
Accidentally hit them with an item, a Pokemon, or an Assist? Did they later get KOed at some point? Well, they're probably hitting you to get you to KO yourself in order to make the score even. They want Sudden Death to happen, and it can't happen unless everyone has the same score. This is an unspoken rule so a lot of people don't understand or get what it means sometimes.
Alright, well I'm helping them deal with a crasher but they're hitting me...!
It could be to negate the "Targetting a single Player" penalty.
Or perhaps you ended up KOing them in the process and again, they're trying to get you to KO yourself to even the score.
Well I'm really sick of Taunt Parties, so what can I do about it...?
You can always avoid Single Player For Fun. It doesn't happen in For Glory or in Team For Fun.
If it also bothers you that bad just leave after the match is over and try to find another room; however actually finding a room where Taunt Parties don't exist in For Fun is extremely slim. If you're really bothered by it then just start reporting and blocking people, but good luck. You'll have a lot of people to report and block. If that doesn't satisfy you, then just quit going into the mode.
"But I shouldn't HAVE to quit the mode because of Taunt Parties!"
You're right. You shouldn't, but if they're becoming an annoyance and doing nothing but stressing you there's really no point in you continuing to put up with them. Taunt Parties are going to be severely hard to stop and there's not too much you can do. All the whining and "Stop Taunt Party" petitions won't make them go away. They tried to do justice to get rid of them by creating the Report and Block function and yet they're still here. People are also going to do as they please whether they upset you or not...
You can't stop someone from teabagging you, insulting your mom, or whatever in any other Online Game you play. There's always going to be someone like that. Report and Block them, and then move on. Understand you're still going to get those people.
You can't control what anyone does online, and if you try you're setting yourself up for disappointment and lots of stress.
Well here's a solu-...
Before you offer up a solution, be aware that no matter what you do or say won't make both sides happy. Ever.
Hmm... so, you take part in Taunt Parties, but... they really bother you?
That's kind of what I don't get as well...