Ok, hypothetically, if a player was banned, then went and created a new account, should that new account automatically be banned? Does the ban apply to the account or the person?

As i understand it, it applies to the person. That said the one that drops the ban hammer is the one that decides who it applies to.

So if someone came back from being banned, I should say something about it? I mean, technically, there's no rule against it (assuming they didn't have both accounts in the first place).

Dan has given permission to a few people to start over with new accounts.
Report it but don't make a huge deal out of it, it could be one of those people given permission.

I had multiple accounts banned when I multi'd as a low ranker. This account was left intact.

I considered it a rather big warning.

A few as in Dan's friends? Who are the select few and why are not all banned players given the option?

Not all bans are created equal.
Dan's decision and Dan's decision are the two main reasons why some are able to play again.

Kinda arbitrary on his part imo

i can only assume dan has given the players permission to return back to his game to play is due to they plead there case and gave there word they would not do this again if they are given 1 more chance and dan had decided to allow them to return as a new account in all as they taken there punishment and lost what they had. but again only person who can give his reason's or anything would be dan himself