QUOTE
Now. If a moderator simply gets a member's warns up to 7 warns, s/he will be banned.
It doesn't work that way. Not that simply, at least.
Moderator gets member to 7 warns.
Moderator suspends posting ability of the guy for an arbitrarily large amount of time, preferably more than 32767 hours in order to have funny unban times.
Moderator posts a request for a ban in the mod board.
Administrator reads the request and actually bans the member.
As you can see, moderators can not ban. They can only request bans, a lot like a member can't close topics but can ask moderators to. Moderators can not move people among user groups.
I'd bet an admin forgot to put him in a banned group.