I'll try to be as open-minded as I can for this, although I have a strong personal opinion on this, but let's just try to break it down.
First of all, I'm glad to read that you are agreeing with the zero tolerance policy being, in fact, a good policy. So let us keep that in mind for the further analyse of your post.
Alright, so this is where I will critize you. When enforcing rules it is of great importance that you are very consistent in the way you punish people. This is of great importance so that you can communicate with your playerbase in a clear way as to what is and isn't tolerated on the server.
Reviewing this case by case would thus not be a great idea to me. Not only does it put a larger workload on the administration team - that no doubt is already dealing with a lot - it also makes the line of when to issue a permanent ban very vague. People would send in dozen of appeals in regards to "this person was not perma banned, but I am although we basically did the same thing?".
So for the case-by-case review, I'll have to vote a -1.
Let's also keep in mind you said that the zero tolerance policy is a good policy in your opinion, so it is quite contradicting.
Again, this is very vague. Who gets to determine if someone is truely regretful? Based on what do you determine this? And does being regretful make it okay to break the server rules?
The thing about using cheats to gain an advantage is that everyone knows it isn't allowed. There's no debate needed for that. So at one point, a person deliberately made the decision to download, install and use certain cheats to gain an advantage.
Due to the complexity of determining someone's regret, especially on an online platform where you can write what you want, I'll again give this a -1.
Here I can agree with you on a certain level. People sometimes - most of the time - do deserve a second chance. And I think giving a second chance for certain rule breaches is a very good thing! This is already being enforced!
But if we pull this second chance wider and give cheaters a second chance also, that means that deliberate cheaters who show no regret should also get unbanned. Cause, well, people deserve a second chance... I don't think this would be a good thing. It also tolerates the use of cheats too much. You could grow a "I will take the risk and play legit if caught" mentality, since you get a second chance anyway...
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I get that people do make mistakes, believe me, I do. I certainly don't have an empty admin record myself. The thing is, at some point one must draw a line. Certain things are just so obviously not allowed so a permaban can be justified.