Can someone explain what he was actually doing here?

Was the issue that he was reselling these Claude.md files, or that he was selling project setup or creation services to his clients?

Or maybe all scaffolding activity (back and forth) looked like automated usage?

if possible, can you quote the part of their TOS/TOU that says i can't use something like aider? (aider is the only one i know, i'm not promoting it)

Only people who work at Anthropic know why the account was flagged & banned & they will never tell you.