OK, I feel a bit of a jerk for laying that trap, because I knew that is what you would answer, so rather than just saying you are not correct, I’ll explain why.
The main rule of a Mak’gora is that the -Challenger- chooses the terms, but has to choose terms that both parties can meet, otherwise it is an invalid Mak’gora and can be refused with no loss of honour, an example of this would be say, a Mage Calling Mak’gora against a Warrior and saying “The weapons permitted are Arcane Magic only” The Warrior could honourably refuse, and the Mage would be the one who would lose honour for trying to ‘rig’ the fight. (Interestingly this is different from our real world duels where it was the -Challenged- party who chose between pistols or swords, not the -Challenger-)
What you describe there is the Traditional way the -Tauren- fight duels, which Cairne chooses as the Challenger.
If you look up ‘Mak’gora’ on Wowpedia it lists the Lore Mak’gora that have been fought, with canon sources, who fought them, and what the rules were. In some cases, like Shagara vs Ashra it was one weapon was allowed, no body armour, but clothing was allowed, and it was to the death, both parties could use magic (and they sure did!)
Sometimes a Mak’gora is issued and no rules are specified, which is pretty much an ‘Anything goes’ scenario. Examples of that type of Mak’gora are the First and Second Mak’gara between Thrall and Garrosh, Saurfang vs Malfurion, and Saurfang vs Sylvanas.
Magic is not forbidden.
Check out ‘Mak’gora’ on Wowpedia (Its more reliable than Wowwiki because it provides Blizzard sources) and you will see what I mean.
It even states there that people -mistakenly- think that Thrall cheated in the Second Mak’gora, whereas he didn’t, it was the same rules as for his and Garrosh’s First Mak’gora, but nobody seemed to complain then, possibly because Garrosh was winning, until the Scourge turned up and disrupted it.
Interestingly you can recall your challenge without any honour being lost, Such as when Ga’nar challenges Durotan in WoD, is talked out of it, and withdraws his challenge.
You can choose to spare your opponent, but this is seen as dishonourable to the person spared, an example of this is Hans’gar and Franzok who were unwilling to kill each other, and so both were exiled.
This only seems to apply to Orcs, (and some Ogres) as the Orcs realise that the traditional punishment for infractions in Orcish society simply have no effect on other races, as they do not belong to a Clan to be exiled from.
For example when Ashra Valandril (a Blood Elf) challenges Shagara (an Orc), Ashra does not even know how a Mak’gora works, nor does he particularly care, he was just challenging her fitness to lead. Both go at it hammer and tongs, with blades and magic, and Shagara narrowly wins, but even though the terms were ‘To the death’ she spares him, because heck, he had just shown he was one hell of a fighter. She loses no honour, because he is not an Orc and bound by the clan system, and He can’t be exiled from a Clan for being spared, because he is a Blood Elf, and they simply don’t have that culture.
Seriously, check it out, ‘Mak’gora’ on Wowpedia, it lists all the Mak’gora fought in lore, and is actually pretty interesting as a lore source 