If I remember correctly, the first instance of a punishment (disregarding 14-day bans) typically results in a clean account going down to Honor Level 1 - and since Honor Level 2 is the baseline, we kind of have to count Honor Level 1 as "dishonorable", since one would actually have to have broken the rules and gotten punished for it to get there.
It's great that some people may be reforming, and have probably worked their way up to Honor Level 1 out of Level 0, but they've still got a ways to go before they can regain Honorable status.
And, like Imperial Pandaa said - given that Honor Level 2 is the baseline, and most first offenses result in being dropped to Level 1, that would probably result in people who were just recently toxic - who would have otherwise been disqualified from End of Season rewards - to qualify for them, despite having only just gotten off their chat restriction.