If circle camping is the issue, why isn't Smashville banned? <.<
If the stage layout allows blatant circle camping to the point where being faster/more mobile than your opponent secures a win across the entire cast, then it's a problem. Usually this is due to how large the stage is, because the more room you have the further away from them you can be after running away.
It's the difference between trying to catch a sprinter inside your house instead of trying to catch him on a football field. Both environments would have circles to abuse, but the more room you have the longer the sprinter can abuse his mobility advantage on you.
Take Sonic vs TL for example. If those 2 characters played on Hyrule Temple for example, there's no way TL would win. If Sonic ever gets the lead, it's basically game over. There's way too much area for TL to traverse in time to catch him.
Now, place those 2 on Smashville. While there is a circle for the stage, it's not so large that Sonic can move himself from 1 point to the other and completely outdistance TL by a significant margin over and over. You can't simply pick a faster character and go "you can't catch me", at least certainly not to any degree equivalent to what you can do on stages where it is a significant problem like Spear Pillar and Hyrule.
Having a circle itself? Not inherently bad. Having a "bad" circle like Hyrule, Hanenbow, etc? That's definitely a problem.
We could try making a custom stage which isolates the element of cave of life without creating circle or semicircle camping. Then from there try to determine of a cave of life in and of itself is a bannable offense.
I think its not the stage but the character causing circle camping issues in this case. Nor is unbeatable from what tournament data indicates.
Either way it wouldn't matter. There's not a single stage in Brawl that has a cave of life by itself, unaccompanied by a bad circle camping issue. Even if you did isolate the two and looked at it by itself, it wouldn't matter from a practical standpoint. There's no cave-like stage out there that also doesn't have circle camping or something else blatantly wrong; doing a hardcore analysis of cave qualities at this point would have no impact on the legality of stages regardless of what was shown.