As Jamaree mentioned, Riot has previously tried what amounted to permanent chat bans (or rather, restrictions) in the past, and it didn't work. Players under the longer scale chat restrictions simply resorted to trolling and intentionally feeding to express their contempt for their teammates.
And of course, the argument is inevitably gonna come up; "well, then ban them when they int/troll". That doesn't work. For one, feeding/trolling detection still isn't great, so there's an unfortunate gap between "player gets muted" and "player gets banned for trolling" where they do troll, and ruin more games, in ways more tangible than they would through simple chat misbehavior.
Second, there needs to be punishments in place to discourage chat misbehavior, not simply give up and say "fuck it, if you can't use chat properly, then you just won't get to use it at all". It should be on the player to change their chat behavior and reform, not on Riot to try and inhibit the damage they can cause until they inevitably find some other way to misbehave.
For that reason, Riot uses the 14-day ban and permanent ban, both extremely tangible punishments that send the message of "this needs to stop" far better than simple chat restrictions. Because, if a player goes through the 10-game and 25-game chat restrictions and still doesn't shape up, what are the odds that a third chat restriction is gonna have any greater impact?
Chat blocked/disabled mean they can no longer type anything in chat, they can only use emotes and pings, since they never use chat for good stuff.
After 1 year they can use chat, but any punishment will result instant chat blocked/removed for another year, some of you may think it is small period of time but it actually solves the problem we have (my opinion).
That depends on what you define "the problem" as. To me, it looks like the problem you're trying to address is just the fact that Riot bans players for continuous, belligerent chat misbehavior. If you defined the problem as "players continuously abusing the chat to flame", you likely would've come to a conclusion that didn't involve removing the ban tiers for chat-related punishments.
