They can release a totally uncut version 
because 
it's ANIMATED child pornography, no children hurt 
or used in the making of this feature, which is 
why child pornography is outlawed.  

There's not enough to defeat local obscenity 
laws, however.  Also, the ruling that would keep 
cartoon child porn legal was made after Kite's 
initial release.

Jurisprudence would still indicate that it's much 
safer to release the edited version, which is how 
the creator wanted it anyway.