Malachor V is, presumably, still floating in space in the Classic era, so can feasibly be used as a Sith nexus. The artwork would make it canonical for the period in question, too (if it was an intact planet, then we'd have timeline issues).
The artwork depicts Malachor as it looked during KOTOR 2: partially destroyed due to the use of a Sith weapon. The canonical (i.e. light side) ending of the game results in its complete destruction. If you go to Malachor during the Classic era, all you're going to find is debris.
So I guess I don't see why it'd be worse for dead characters like Nomi Sunrider or Bastila Shan to appear in this era than it is for a destroyed planet to do so.
Aha, I forgot about the canon/non-canon stuff. I knew it was destroyed at the end of the game, just not to what extent!