I wonder how these bots perform the shorting. Do they take the modified instruction and increase miner reward to make it more prioritized than the original transaction? Such a bot would be hard to counter as if you set some reward value, even if it's extremely high, it would take it and increase it by 1. Even if you saw that value yourself and increased it yourself, they could counter your counter by inceasing again, the process continuing until everything is eaten up by miner rewards.

If you have multiple such bots, would they fight over the loot, increasing the reward until it's all given to the miners?

Are there any logs of rejected transactions that existed in the mempool? Is there evidence of such fighting?