i've been entering quilts in the fair and a couple local shows for years---every item i make is washed before going anywhere- i've never heard of a rule that it could not be washed- in fact one show they are very (picky) at and have disqualified quilts that had not been washed.
they must be clean- mark free for entry.
every quilted item i make is laundered as soon as the binding is done- it is to me the last and best step of the whole process.