Maybe they just have simple hashes (unsalted) of their disallowed passwords and flag hits to them. They compute all the password combos that trash the CCP (and whatever else) and autoban, I guess...
I doubt people were using "Fuck", rather something like "FuckMyEx" or whatever, which has a completely different hash. Also, passwords should be hashed with salt.
“Should“ but do they?
In which case they aren't even salting the password, which means that hashing the password isn't doing a whole heap. It isn't plaintext, but it isn't that far from it.