How to make the Rules module block flagged users from sending entityform submissions?
It seems pretty obvious to me that something in any of your Rules Conditions is not working as you'd expect/want them to work. Which would also explain your "I can't get the rule to not submit".

Basic debugging

You clearly have a combination of Rules Conditions that need some debugging.  Rules is great, but sometimes also tough to debug if things don't work as you'd expect. There are some typical facilities to do such debugging, but my Keep-It-Super-Simple technique I often use is my BINGO-trick. A sample of such rule can be found in my answer to "Which Rules condition can be used to email a user when an admin updates their profile?". Stupid, but simple and efficient (I think).

Also, since you have 3 Rules Conditions in a single rule, you should try to see what happens (if you get a "bingo") for each of the individual Rules Conditions. This by simply (temporary) removing 2 out of the 3 Rules Conditions you are using, and verify if they each result in the Rules Action you'd expect (also just a simple Bingo-message should be sufficient).

Advanced debugging

Something else that will help you find the answer to your question, is to have a look at Rules debugging ... Within the Rules settings, experiment a bit with the debugging facilities that come with the rules module. At least have a look at the "Rules Evaluation Log" (to check that the Rules logic being executed, actually matches what you expect that logic to be).

Depending on what the result of that type of debugging is, you may also want to (temporary) enable the Devel module, so that you can (temporary) add a Rules Action like "Display a value" (in your case of your node:comments).

For way more details about these 2 variations, refer to Rules debugging, as explained in the answer to "How can I display the value of a variable inside a condition?".