Terminating after 1 offence, 2 offences, or n offences only changes how long a competitor / blackmailer / disgruntled former employee or ex-spouse / random bored idiot with a stolen credit card needs to continue paying for clicks.
They don't charge the ad buyer. My account was terminated 15+ years ago, still can't run ads under that account for some reason I do not know, but they were able to detect it and block it, whatever "it" was. So I'm punished forever for something forever unknown to me, despite not doing anything. I think the rule is unfair.
It seems unfair to the point that the entire model is unworkable. Well, perhaps they could ignore the "fraudulent" clicks when billing and never terminate anybody.
By "paying for clicks", I was thinking that they'd be paying some service to click on the ads, rather than writing their own scripts or doing it manually.