I agree that BGA has a very clear and enforced policy that if you play against yourself with multiple accounts they will punish you if they can prove it.
I agree that the Terms of Service technically say they can ban you for having multiple accounts, but they don't seem to have ever enforced it, and indeed enforcing it seems pretty hard/impossible to prove most of the time. I personally don't think there is anything wrong with one having multiple accounts.
I do STRONGLY agree however that using multiple accounts during a single arena season is wrong. I will admit to having a smurf account that many in the Terra Mystica community know about being me, but I've been very particular about only playing arena seasons with either my main account (this Ranior one) or with the smurf account. I've never and will not play with both of my accounts during the same arena season. It leads to all sorts of issues that you've laid out. I think the biggest one is taking up multiple spots on the ladder, but other nefarious things pop up too if you're trying to do well with one account and can use other accounts to just try and target other top rated players, etc.
I also would like an official policy that players should only use one account in any given game for an arena season. I personally don't even mind if players choose to make a smurf account for an arena season as long as they use only that account for the season.
With all that said, I will admit this too is basically impossible to force or detect. Even if the official rules get updated, it basically will just change the incentive structure to lead to multi accounts/smurfers to be more creative with their usernames and patterns so they aren't detected. I see no good way around this. So ultimately I don't think it matters too much what BGA decides to do on this one as I don't think there's a great way to get around it. Perhaps it's a bit too idealistic, but I think the better hope is to simply encourage others to not engage in this behavior. Reaching out and explaining the situation to some players can work--I know at least one player in Terra Mystica played with multiple accounts one season but won't going forward once they understood that taking up multiple spots on the leaderboard is essentially denying other players their fair shot at top X placement, which wasn't something they had thought deeply about. I'm not saying all multi accounters will be so ethical, but I actually think many/most would. I think a decent number of games on BGA are starting to have communities form up around them and some top players are streaming games and becoming leaders of those communities, I think what they say and show to others can help form expected behaviors and help out....However, I will finally state that it may be too idealistic a viewpoint from me, and that it works better for the Terra Mystica world where I think it's a lot harder to move to high rankings rapidly and there is less advantages to smurfing. I suspect 7 Wonders may just always get plagued by smurfing as the benefits are too great to ignore for those that really want to win.