As far as i understand even if you are marked as cheater you can still play with friends normally right?
Also a question i want to know, cause if that's the cause then who cares. They did say that players marked as cheaters will be put in servers/ques with other players that were cheating. Sort of like being Softbanned on Dark Souls.
Didn't both players have to be soft-banned to play together in DS though? If this game is like that then you'll likely both have to flagged to play together so if your friends play without cheats then you'll either have to play it on another account (if that works) or just not cheat.
Has there been any confirmation as to how intrusive the watermark will be on the screen?