Why isn’t the third party software ban enforced?

[Halivel]

It is cheating, you aren't wrong here.
However, Yoshida specifically stated that they don't want to check our PCs for this stuff. He did also mention laws. Don't forget that Square Enix is a Japanese company located in Japan, so their legal conditions are different, we don't know the full picture as we aren't their lawyers. This quote is taken from LL translation from Reddit discord, dated by 2020, February 6th, when Yoshida talked about implementation of changes to Way Markers system.

"We cannot do anything, if people have a little window on their screen showing ACT. We don't want to "scan" your computer for the software you have installed, that's against the law anyway. There are additional plugins for ACT that influence game play a lot, this is breaking game balance and is target of more severe penalties"
"For example, during the world first race for Alex ultimate, there was a tool used to instantly replace waymarks during the fight, i am sure some of you have seen that"
"That was the first time I learned a tool like that exists"
"Players can replace waymarks on their own during the fight of course, but having a tool place them instantly sending the command to the server through the game is wrong. Please don't do this. We have taken actions on our side to prevent this from happening again, I will show you a bit on the machine later"
"There have been clips going around of a tool showing where an untargeted aoe will hit, if we catch you doing this, this will have a heavy penalty"

That said, if you encounter people who use this stuff and can prove it - you have full right to report them.