A game with prevalent hacking/cheating is going to go downhill quick and lose it's established player base. Catering to these people in any way does not seem like a wise strategy.
The options presented are 1) segregate them into a separate pool, as suggested. They can then still give you money, the arms race is short circuited, and they don't impact the enjoyment of other players.
And then they possibly create an account and tread more carefully next time so they don’t lose their skins. This is behavior you can even see in streamers that get banned.
Frankly I think a zero tolerance approach to
cheating makes sense and sends a more
serious message. It still looks bad if cheaters exist even to other cheaters, for example a shadowbanned streamer, and makes it harder to take your game seriously.
Sorry, I was meaning my comment from the context of the conversation, where they'd be in a separate pool competing against each other. If cheaters want to cheat each other, it's no skin of my nose. Might still be a good revenue stream for Riot.
2) You ban them.