I believe this has been rectified and now if you get caught breaking Gemini ToS, it just bans you from Gemini (I think you might even get a cool-down warning ban first).

For more egregious violations like the kid uploading naked pictures of himself, I don't know.

Glad to see this. However, given the general level of product confusion in the Gemini lineup, I'm not planning on relying on this even if it is their intent.

They said it was rectified and some weeks later people kept getting banned.

You can't trust them. It's not worth the risk. And the models and lack of subsidy definitely don't warrant the risk.