Depends a lot on the game. If there is nothing to be 'earned' by being competitively better then it is nothing more than street cred. Think simple games or older games. CS 1.6 before rewards, knifes, and skins. A small few players might make some comp scene to get to some incentive but most are ultimately found out.

The bigger issue, and I believe the primary reason for the rise in popularity of these bots, is when your performance does 'earn' you something. As the OP was speaking of TF2, this comes in the form of hats and custom weapons. Today's counterstrike game has weapon skins and knifes that go for pretty extreme real world dollars.

Almost every modern shooter has some sort of rank up system tied to rewards. Some of the worst examples would be PUBG's real world money trading of loot box items or Diablo 3's real world money auction house.

In my mind, these kind of systems turn video games meant for enjoyment into some weird NFT mining system where normal players are manually mining them with pen and paper while the bots have built ASIC devices.

In cases where the items themselves cannot be sold, you have people selling the whole accounts. There are entire middlemen businesses set up around this stuff. It's crazy but there is your primary driver for incentive.