Especially a TOS violation that isn’t a violation in the more expensive package. It’s clearly a tactic to kick out customers who cost them too much.

it’s because the cheaper tiers share IPs with literally every other CF customer. Of course it’s more expensive to not do that, it has nothing to do with trying to make a sale.

This is how I view it. Even if they were doing it maliciously, it is still a company and cloud flare should make the assumption they didn’t know they were doing anything wrong. Tell them it’s actually not allowed, that you just caught it, and give a clear (reasonable) timeline on getting to compliance.