After listening to the audio interview on Axebomber (great interview btw), I started thinking about the segment on taunts and how they should affect gameplay. Here's my two cents:

When a player taunts, perhaps it should add damage to the very next move they perform. But as a risk factor, it also increases their chances of being reversed on the very next move they perform.

In wrestling, wrestlers usually taunt before performing a big move. Giving additional damage to the move performed after a taunt gives the player incentive to taunt. The risk factor of having a higher reverse percentage for the very next move they perform prevents the player from spamming taunts.

Think about it. When wrestlers get too cocky and start taunting their opponent, what usually happens? Their opponent makes a comeback. However if a wrestler does a taunt or signals for their finisher and pulls it off successfully, it adds more "umph" to the moment and usually indicates the end of the match.

I think this added stipulation would mimic the way matches play out in real life, while adding a new strategic element to taunting.