I'm a little surprised at this. It was only a few days ago that the official planetside2 twitter account was linking to beautiful Planetside 2 wallpapers made with SweetFX, and Matt Higby have previously commented that he used SweetFX as well, so I had the feeling that they liked my mod at SOE. The community certainly did.
The current policy of banning people when in doubt seems harsh to me, when a server kick with a warning would have accomplished the same. It's not like permabanning people is going to stop cheaters for long - it's a free-to-play so they'll just make new accounts.