I'm playing WoW and I've heard lots of compains about Blizzard banning innocent players. Just recently there was a wave of complains that they banned players who spent a lot of time farming one dungeon (like 10+ hours per day).
I, myself, got two accounts banned and I was innocent. I managed to make it through support and got them unbanned but I'm fairly certain that many players didn't, because they seem to employ AI in their support.
So I'm a bit skeptical about that kind of behavioural bans. You risk banning a lot of dedicated players who happened to play differently from the majority and that tend to bring bad reputation. For example I no longer purchase yearly subscription, because I'm afraid of sudden ban and losing lots of unspent subscription time.
I agree that it's a problem, having a strong support system for remediating false bans is very important.
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I think you are right on every point, but I think it's worth noting that WoW is kind of a different beast.
You don't play a "match", you don't play "against" other players most of the time, in this context "botting" and "cheating" overlap because having your character do stuff 24/7 unattended is an evident advantage over the rest of the population, but it's not like you are hindering anyone's progress directly the vast majority of the time doing so.
How often does actual cheating happen in WoW, anywhere it matters? M+? Raiding? PvP?