I've always had party window mod on whenever I had abyss and I've never been banned for it. Don't know how true the rumors are, guess some guy was just super unlucky
It sounded like it was a group of people.
And honestly, you don't really need the infinite party mod. Open a party, leave it open and change channels, after you've loaded the new channel leave it closed and change back to the original channel, and now if you leave it closed you'll advertise indefinitely in the party chat channel. Ie, start in ch 1 with open, switch to ch 2 and leave it closed, then switch back to ch 1 and leave it closed.
Only way i could see people being banned for this mod though, is if they afk'd right in the middle of dunby or some other populated region, cuz otherwise the mods would have to have some method to differentiate people using the bug over using the mod, and i don't see them designing something like that for a mod like this, when a bug already exists to take advantage of party advertising.