Why can't Graves have a cigarrete if you put this on the esrb rating?

Because it would cause problems with other countries, and it would be a poor business decision to miss out on an entire nations worth of customers just to include a cigar.

because rito

Because he looks mildly suggestive with his theme.

I'm willing to bet it has something to do with Chinese overlords and their cultural rules we find silly, just like the displayal of bones/skulls.

Who cares? It doesn't affect gameplay. It's a decision they made. It's fine. It doesn't hurt you in any way.