From my understanding, Paper and the like are good for Minecraft servers focused around specific mini-games (rather than freedorm building), and are the only sensible choice for servers with many people (or not that many people, but really underpowered hardware).
However, they may be a problem if players are sensitive to possible non-vanilla behaviour (as you mentioned, and it’s not limited to cheaty duping). Thankfully, spinning up a server with a selection of performance mods is very easy these days. Various tricks like pre-generating chunks in advance also help.