It was considered compliant when we made the WC bid. The opening game was to be there and a semi.
If I recall though, this was pretty contentious. The back 15 rows or so were further from the field than the stated maximum in the FIFA handbook.
However, FIFA had bent/ignored/been bribed to look the other way before when it came to World Cup stadiums, so the decision was made to use the MCG based on capacity.
I think the issue was that if they'd used Etihad, the guide states that modular stadiums have to be used in 'football mode' for FIFA events - dropping ground capacity to 48k, and ruling it out of contention for the final and semi finals (which require 75k for the final and 60k for the semis) and the opening match (which requires 50k).
It would have left Melbourne only being able to host quarters and the third-place playoff, and the Victorian government were never going to get behind that.