Yes, it should.  I have set <IsAvailableForSovereignCustomization>0</IsAvailableForSovereignCustomization> whereas before the Bunny Slippers were a "1" in there, making them available.  A "0" value prevents them from showing up.

Note: any Sovs customised before installing the mod file can still have any item selected before, but as the people who don't want the item at all are unlikely to have chosen it for a custom sov, this doesn't matter.

^ I'd take that as "the mod isn't perfect", and you may see the items still appear, but as meaningless empty slots.

I've seen this happen in other mods.  I still can't find which mod is causing it, but I have a "building" appearing as an empty slot that "can be built" taking up one turn to build.  It's clearly a glitch that accomplishes nothing by building it.  The only thing building it accomplishes is you will no longer see it on your list of things to build for your settlement afterwards. 

A small annoyance, but not game-ruining.  I imagine that's the case here as well.

I don't think it will ever show up as an empty item, as it is not a usual category and there should be no chance of it appearing anyway.  But there is no graphic associated with it, so if by a fluke it did show up, it would show up as an empty item with no graphic with a selling value of 1 or 2 gildar.

So it would only show up as a fluke, but even that is very far-fetched.

So when is the mod that adds more joke items coming out? Like Bunny Ears helm and a Giant Rabbit Mount?

(Kidding, kidding. I haven't got a problem with the joke items, but I think it's good that you have made this mod so those that dislike them can play without.)