On Dwi, the ruler was expected to enforce SMA... the OOC ban is the only tool a ruler has. If it was desired that he be banned, then we'd have said it was the judge's job, not the ruler's. I believe OOC bans were given on multiple occasions for players who refused to change their inappropriate names. On Dwi, however.
Nobody has the right to make up OOC rules, so whether it was fine or not on Dwi, certainly wouldn't have been on FEI.