How about adding a new rank for
1: new members who you want to observe to ensure compliance to legion rules,
2: demoting standing members who repeatedly make stupid mistakes (like killing weak bases too quick) or break NAP's.

Also have options for base shipments to be reduced or disabled for this rank.

If an option to restrict them from targeting bases was added, +1.

While using the Game or Materials, you agree not to:

Restrict or inhibit any other player, user or member from using the Game

"Punishment" by a leader in the form of disallowing base battles, base payouts, CTLab & UST access, etc. which a player would be eligible for given the qualifications established by legion loyalty would be a direct violation of the current game ToS. For Dan to establish a "punishment" system that includes anything like that would be self-contradictory and will not be added.

According to that, the legion rules system which restricts normal members (as opposed to officers or leaders) from locking bases, building /destroying base modules, using the base abilities, repair bay, ct lab, commerce bay, etc. are a violation of the TOS. I don't see how the argument that allows that ("the player can choose to be in a different legion") wouldn't apply to these proposed rules.

All this would do would create a new "group". There is no difference, other than one you are coming up with in your attempt to turn this into a shouting match. using caps does not make your argument any more cogent, nor convincing.
In specific, the ability to "kick" a player from a legion should be removed from the game according to your reading of the TOS.

1) I don't want to be a US citizen, just saying'
2) Instead of leaving, I'd try make myself respected

First, I emphasize, not yell.

Second, you are confusing Rights and Privileges. Do you have the right to be in a legion? No, that's a privilege. Much the same as not everyone in the world has a right to be a US citizen. But if you have the qualifications and meet the requirements (recruiting standards) you can become one. Then you get the right to vote for example after you are naturalized (legion loyalty enabling use of the UST and such). The leadership of a legion has the responsibility to establish who has the privilege to use base abilities, commerce bay, etc. just like the government has the responsibility to establish who has the privilege of driving a car.

I'm not arguing against a probation group per se if it were just mandatory pre-loyalty. I don't see the need though for an optional group like that, if I joined a new legion and they said I was on probation.... See ya, I'll find a legion that respects me enough to consider me a full member. Assuming something like this actually got implemented, don't you see what would happen? New members that get lumped in an optional Probationary group are going to leave immediately, just like I would. And used as a punishment, they're going to also leave. How is that going to help a legion? May as well take away their privilege of membership and just boot. Word gets out, no one joins, people leave because they get bumped for the tiniest little infraction, legion dies. All in all, ToS aside, its a HORRIBLE idea.

I am not suggesting this aspect be used for new legion members.
An example of the proper use for this is when someone who does want to be in a legion breaches the legion rules about base combat. Up till now, the only real way of penalizing the person would be to kick and reinvite (yes, this only works for people who really do want to stay in that legion). Unfortunately, this causes a 7 day penalty. This suggestion would allow someone to be penalized for shorter, specific time periods.

You're missing the point. You as a player have no right to punish anyone by taking away a right of membership. By being a loyal member of a legion, that player has a right to battle bases or whatever else a common member of the legion is able to do. If they don't follow the rules laid out for membership in the legion, they need to be removed.

As an aside, you shouldn't even HAVE any rule for base battles beyond "Shoot till its dead." If you're worried about bases dying too soon, you're doing your legion a disservice by not challenging them. We tried the whole "Tap and fill the slots" thing when battles first started, and someone ALWAYS gets screwed and someone ALWAYS ignores the plan.