As a player who's never been reported, why aren't behavior penalties ever forgiven?

[SturmChurro]

Barely any. It's all a matter of how far someone else wants to take their (often minor) slight. Some GMs will roll their eyes at these people, and others will cater to their every whim.
These people in my opinion, are far more toxic than even those that actively go out of their way to sling insults. Cry bullies who want to rip a game and hobby away forever from someone who annoyed them. And they never get punished for their antics either, because there's no rules against being like that.
They are the worst, and unfortunately are more common than one would like to imagine.

Well said. Even if someone did throw an insult it is of my personal opinion that they do not deserve to lose potentially thousands of hours of work put into their account. Even if I hate the person, if someone throws an insult at me I would rather deal with it myself or ignore it all together. I never report anyone over something petty like that in-game, have never once used the report feature. The most I'll report is some gold spam or something, but I think you can right click report that, but it's been so long since I think I have even done that I am not 100% on that. I don't even think there should even be some sort of strike system, you should only be permanently banned for the most egregious of offenses. This is an mmorpg where you are potentially putting thousands of hours of your life, and thousands upon thousands of dollars into your account. You shouldn't lose it all because you hurt someones "feewings" at some point in what could be several years.

People go out of their way, and take the time out of their day for some petty "revenge" with the line of thinking 'we don't need those kind of people in OUR game". You see it all the time in these threads. When they report you, they report you with the goal of getting you banned, and to them, preferably permanently.