It is messing with the connection to change game play, and that IS against PSN terms of service (IDK about Live).
So based on that, they could get their PSN account banned. I personally don't care if they do, or if they don't, but I'm not going to mess with it because I don't want to run the risk of loosing my account.
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If they ban the psn accounts I'll just go sell my ps4 and buy a gaming pc then.