A ban for first offense seems excessive, but to be fair, this whole situation must be quite stressful for them and being asked by hundreds of users for support of X or Y alternative seems like it would quickly become annoying.

Browser fingerprinting is a thing (identifying someone by their browser's configuration and fonts, amongst other things), but I don't see them using that for bans honestly.

For what it's worth, having a few "bigger" instances means less confusion for users who don't completely understand federation yet but still want to make the switch. I wouldn't call it a bad thing, they can always turn to another smaller instance later on.

Note that a lot of free VPNs are easily identifiable and blacklisted by a lot of websites. Hell, even some paid ones have blacklisted IPs sometimes.