People should only be banned for (chat) toxicity if it is sever (irl threats, racism, slurs, "kys", etc), and instead the system should be directed at people who ACTUALLY ruin the game, like trolls, inters, afkers/leavers, etc.
Why not both? There's no good reason why Riot shouldn't punish other, non-zero-tolerance forms of toxicity alongside the ZT stuff.
And the system does already punish gameplay misbehavior, like intentional feeding and trolling. The issue is that, because intent has to be determined to merit a punishment, it's much harder (and consequently slower) to actually deal with gameplay misbehavior.
Right now the chat punishments are insane and it is incredibly easy to get punished for chat. This leads to a lot of people who get banned for mild toxicity...
It's incredibly easy if you're prone to breaking the rules, yeah. In reality, getting a punishment isn't as easy as you think, and it takes a concerted effort to get punished for mild toxicity. The IFS punishes based off of consistency and severity, meaning that mild toxicity will slowly edge you closer towards a punishment, while harsher toxicity will get you punished faster.
And of course, if you don't break the rules at all, you'll never get punished. It is incredibly easy to not get punished.
You rarely ever see a player who's been permabanned who says "my ban was deserved and I am going to no longer flame anyone or use chat unless it is constructive"...
I've seen a few, though usually they claim that they'll behave better in an attempt to have their account unbanned.
Other games like OW, R6 Siege, Smite, etc, (from my experience with well over 1000 hours in all 3 of those games, obviously anecdotal but still not worth nothing) smurfing is a much smaller of a problem. Given, games like OW and Siege are not F2P, but the fact that permanent bans either don't exist (for chat) or are a lot more scarce than in League is a valid point that should be looked at.
I disagree, but here's a counterpoint;
Toxic players drive off non-toxic players, which is why Riot permanently bans for chat toxicity - 'cause they know people don't like being treated like shit. I haven't myself played Rainbow 6: Siege, and my reasons for ditching Overwatch aren't behaviorally related, but I can tell you with certainty that I ditched Smite twice because I couldn't stand how toxic the community there is.
And I have a pretty high tolerance for bullshit, so that should say something about Smite, even anecdotally.
And, at the end of the day, whether or not "no chat-related bans" works for those games, Riot has decided that banning for chat works for their game.
...there are a lot of people who just soft int or afk/leave because there is 0 punishment for it.
Intentionally feeding, once detected, results in a 14-day suspension for the first offense, and a permanent suspension for the second offense.
AFK'ing/leaving is tied to the LeaverBuster system, and results in Low Priority Queue building up to a 20-minute wait time between matches.
And, anecdotally - and I have no reliable proof for this, so take this with a grain of salt - there is the likelihood that AFK behaviors can result in a gameplay-toxicity punishment (14-day ban > permaban).
It's not that there is no punishment for it, it's that those players who pull that stuff just don't care about the punishment.
People should not be punished for mild flame...
You still haven't given any good reason for that.
...especially when the mute button exists (as well as options to turn of chat) and is a great way to not see what somebody is saying.
The mute feature and Disable Ally Chat feature are not excuses for breaking the rules. Just because they exist doesn't mean the rules should change and that people should use those or suffer toxicity instead of players being held responsible for their poor behavior.
The mute feature is a band-aid solution, meant to mitigate the short-term impact of toxicity and poor chat behavior. It's meant as a response to toxicity, not a preemptive defense.
And the Disable Ally Chat feature is meant for players who otherwise have major issues with chat, whether it be retaliatory behavior or simply not wanting to deal with other players chat-wise.
Now what if I'm a player who doesn't want to have to mute everyone because they're all rampant assholes, and still want to use chat, precluding me from using Disable Ally Chat? I'm not going to just sit there and take abuse, if you're going to be toxic, you're going to get punished. Simple as that.