I think temporarily suspending them is the right choice. For server health we need a good population, if that many people are instantly banned then the game world will suffer. Even if they "were" cheaters, they will be on the straight and narrow now because they know that doing it again is instant full ban.
Yes I know many people feel they should be fully banned from the get go, but even a "cheater free" server with a tiny population isn't that great of an option. I played on a server with a small population and while it's easy to camp things, it begins to feel like a one player game and that is NOT classic everquest.
Suspension and warning takes care of the majority of the issue because in the future no one will risk it and now there is FAR less wealth in the game. Time for the economy to come back to a decent level.
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