This is, and always has been, something that has to be handled more-or-less IC, by the players involved. And a lot depends on the specifics of the case: I've seen people create new accounts, with completely different family and character names, and then claim to be the previous character. Not the reincarnation, a relative or anything, but the same character.
That's not reasonable.
Re-creating an account with the same family name, and the same character name, and claiming to be the same character, can work. It works best if the character on the old account was not old, and did not have large amounts of honour and prestige, because the new one obviously will not.
Re-creating an old character on the same account he was originally on is a similar issue to the above.
Re-creating an account with the same family name, but new characters, shouldn't cause any problem, in my view.
But the bottom line is: No player or character is required to accept this. Nor are they required to reject it. Even if some members of the realm accept it, others are free to declare that the returned player's characters are insane or impostors, and maintain this belief.