In most cases like this there are ways to use it to gain an unfair advantage over others, for example by swapping enemy visuals to make it more obvious what they're doing, or by swapping textures for scenery to give you a boost. So if you're found out, I imagine you'd be punished even if you're just giving yourself a cool-looking hat you can't be bothered to earn properly.

I have to admit that I don't personally understand the appeal anyway. Other people not being able to see the cool fashion ideas I come up with would rather take the fun out of them.