The restaurant is closed now which is at the corner.

[Raymott]

Is the strict grammar "no verb/verb to be should be between the antecedent and the relative pronoun"?

That is a sub-rule of the rule. There are lots of things (probably most things) that we don't put between the antecedent and the relative pronoun. This thread just happens to be using "to be".
You also can't say, "The restaurant had good ratings that was on the corner."; "The restaurant burnt down that was on the corner."
I can't think of a good example just offhand of anything that you can usually put there .

 

[Matthew Wai]

"If more restaurants are closed that sit on major roads and corners, people will have to go looking for places to eat."
I still don't like that, but it's more acceptable than the original to me...
Maybe accepting the above sentence and the 'found' one is only a small sin against strict grammar...

Since you still don't like that, I guess it is most acceptable to put the verb after the relative clause, such is consistent with MikeNewYork's Post#15 and the strict grammar (no sin at all). Do I guess wrongly?

 

[Raymott]

Since you still don't like that, I guess it is most acceptable to put the verb after the relative clause, such is consistent with MikeNewYork's Post#15 and the strict grammar (no sin at all). Do I guess wrongly?

The relative clause in correct grammar generally comes immediately after the noun, then the verb and the complement. So, preferring this as Mike does is consistent with that. It may even be prescriptively mandated. However, this can cause problems in comprehension if the relative clause is long, (and can therefore be a sin of a different kind), therefore the verb is sometimes put before the relative clause. This is actually how we use the language, so in descriptive grammar, it's acceptable.
With a short relative clause (such as the original in this thread), it comes straight after the noun it modifies.
Obviously in marginal cases, people will disagree about which sounds better. But the original sentence isn't marginal.