A scene a few minutes earlier that sees Deadpool get shot multiple times has simply removed the CGI blood spray of the exit wounds.
In Deadpool 2 we watched Juggernaut tear Deadpool literally in half.
Violence does happen, but when it does it’s either completely bloodless or it takes place entirely off-screen.
Violence is probably the biggest issue with superhero movies, as the heroes are always fighting somebody, and while Once Upon a Deadpool certainly has its share, it’s well within the confines of the rating.