The idea that there's a cabal of restaurant owners who get together to discuss in detail how they're breaking the law and maintain a blacklist is absurd when you stop to think about it.
But they're more than happy to let those kind of rumours keep doing the rounds to scare the naive young people into not sticking up for themselves.
There are Whatsapp groups of HRs working in a particular group (tech, construction, etc.) where they communicate. Obviously they don't discuss the names openly but they do ask if someone is willing to give feedback on a candidate that worked at XY.
In many cases it's just teenagers being dramatic and coming up with external reasons why they are dealing with suboptimal conditions and not asking the owner about it.