If "abusing" duped items and creating strat battles purely for fun/xp was frowned upon, MURDERTRON would have been punished when it was happening. NA adminship was fully aware of it and there was no discussion of whether it was okay. Plenty of factions used duped gear for real battles to get an upper hand in strat, and the duped items passed hands so many times that people were using them without even knowing it.
The item dupe bug got really out of hand in strat 4, but it happened to everyone. It wasn't a glitch you could do on purpose over and over for your personal gain. Fixing it during the strat round wasn't going to happen. I don't see anything punishable about the xp battles at all. They were a lot of fun and a more ethical use of bugged items than anything else that happened at the time.