In the core Project Accounting module it is possible to create project Statuses and specify whether costs can be entered for a status.

When entering Timesheets in the standard system you are not able to select a project with a status that does not allow costs (as you would expect). However if entering timesheets via WTE, you are able to select a project even if it has a status that does not allow costs.

This was reported in 2011 SP5 originally, and is still not fixed within 2015.