I don't know, but I'm guessing that the site was suggested to a totally inappropriate category as defined in the category description (charter).
Go to the top of the category that the site was suggested to, and use the 'description' link at the top right to read what the category is designed to contain.
Note many categories do not have descriptions (there are projects to correct this over time), but those that do will sometimes have very specific injunctions on the type of sites that should be suggested there.
As far as it being a death knell, that should not be the case (although it probably is with regard to the specific category). I'd suggest checking the site against any category description(s) and suggesting it to a more appropriate category.
Of course, since the only way you could know the content of any editor notes would be to be an editor, you could ask in the internal forums.