Just read the exchange between you and 14-biz ... and I have said this a few times myself; "Their house and their rules." It's not about being in the right or even doing what's right, it's all about what can be gotten away with. This place reminds me of the mucks I used to help run. Clicks where people used their power to bully others.
I really do believe that once you are "being actively monitored for past violations" (their words, not mine, and yes this has been confirmed) you really are part of the "usual suspects" for any sweeps or enforcement they suddenly decide to act on.
I don't call it bullying, but I do believe that a TOS which is used more as a way to "justify" mod activities instead of "guide" them is highly suspect. It is actually happens a lot in real life too.
For example: People can jaywalk anytime they want but once a cop happens to decide to charge you with it you can't really dispute it. However, I am noting a lot of cases here where people are still on the sidewalk and are being charged with jaywalking because they were too close to the road or the cop thinks they are "intending" to jaywalk.
"Reactionay policing" is what is being done here instead of active monitoring of the entire site, so as long as you stay a fly-on-the-wall, you are pretty much under their radar. Become one of the "actively monitored" and you are being held to a different standard than others. Think "double-secret-probation".