It does happen, but it's rare. You have to be a true spammer or phisher to get shut down, and we've found that Google is a lot more lenient with G Suite accounts than regular gmail.com accounts.
And what exactly is a "true spammer," in your view? Your product allows people send 10,000[1] emails at once to people who never opted-in.
You and your product enable spam. Shame on you.
https://www.gmass.co/blog/you-can-now-send-10000-emails-with...
How do you know it's rare? Is there a number you can cite? What's that number based on? Like the OP said, getting your G-Suite account banned is pretty catastrophic, so I hope that's not just a(n informed) guess.
> Google is a lot more lenient with G Suite accounts than regular gmail.com accounts
Can you provide evidence for this assertion?
And if you're a G Suite user, and your G Suite domain otherwise has a good reputation, one single user may get "suspended" for 24 hours, but I've never seen a G Suite user permanently banned UNLESS the whole point of creating that G Suite account on a particular domain was to send out mass emails through every single user account.