So an idea I had for explaining ingame bans is through one of the classic staples of starting a game, a contract. Not one that the player themselves agree too, but one their character agrees to. (Think Persona 3, Bloodborne, games where the contract are part of character creation). This contract allows the player to freely interact out in the field of the game, such as permission to fight enemies and being given missions and side quests. Should the player hack or end up being very abusive in chat, you can say that the player character broke their contract and have their liberties to fight enemies taken away. The player's equipment is confiscated and the player character is forced to atone for their wrongdoings. This atonement take as long as the ban lasts, and if it's a permanent ban the player character cannot renew their contract. Thus the player can no longer play the game.