Actually it looks like they aren't deleting them. SE already fixed that: you can only create a certain number every 24 hours.

What it looks like they are doing is creating 8 of these characters, then logging in one to spam, then logging back out, log back in, rotating through different characters.

I don't know why you can't add to your blist someone who is currently offline though, so instead I walked into the quicksands and just waited until they logged back on, and blisted them before they even started.