why would I want to stay around?
Yes it should be punishable.But in practice investigating such case is many hours (or days) of both devs and GM work, searching logs, looking for and interrogating people, trying to find out who is lying and it's very hard to prove anything. The question is why should this be done in the first place if they aren't paid for it. YOU are responsible for safety of your own account dude. This is a free game. Don't share alts, don't use passwords like "ass", don't let other people install trojans on your PC and you should be fine.
Its actually very easy and it may take a few hours but not days or many hours.You check the logs for character X. What IPs have been there? lets say IP 1, 2 and 3.You ask the owner, what is your IP mate? He says IP 2 is mine. You check and indeed see that IP 2 is the most used with these toons.You the proceed to IP block IP 1 and 3. Hacker blocked.