And then they complain when they gain no knowledge, can't pass the simplest of coding interviews despite their near 4.0 GPA, and blame it all on AI or whatever.

In reality, they cheat when a culture of cheating makes it no longer humiliating to admit you do it, and when the punishments are so lax that it becomes a risk assessment rather than an ethical judgment. Same reason companies decide to break the law when the expected cost of any law enforcement is low enough to be worth it. When I was in college, overt cheating would be expulsion with 2 (and sometimes even 1 if it was bad enough) offenses. Absolutely not worth even giving the impression of any misconduct. Now there are colleges that let student tribunals decide how to punish their classmates who cheat (with the absolutely predictable outcome)