I interpret their argument differently. We know that bullying leads to harmful outcomes. We know that punishment reduces the frequency of undesirable behaviour. So we know that this policy will lead to an aggregate reduction in harm. The question is whether it could lead to some degree of harm to the bully. In the absence of compelling evidence of that, the policy itself seems merited.

For the record, bullying is a complex problem to solve, and no nation or policy or tactic has the silver bullet.