Level flames can only be used on items (not item types, but specific items) that already existed before we had flames.
Since your Maple Treasure items are new (you just bought them from … (more)the shop), only Powerful and Eternal flames will work on them.
The in-game indication as to whether an item can or can't have level flames applied to it, is the small circle in the top left of the item icon on the tooltip. If it is solid white, the item can only use Powerful and Eternal flames. If it is gray, the item can take leveled flames. (less)
There is no evidence to suggest that Nexon is actively banning people for using suicide Kanna's, there are a few people who've protested a ban, but we have no way to know how or why they were banned.
That’s just... plain false. There’s more than enough proof that death abuse is being actively banned. GM’s have said more than once it’s not intended gameplay and is against the ToS. People have posted GM chat logs showing them saying that death abuse is bannable. Please don’t suggest Suicide Kanna to someone and get them banned.(less)
And yet hundreds if not thousands continue to suicide farm with no ban. And Nexon has not issued any warning to players to stop doing it.
Contrary to popular belief, Nexon is not out to ban as many players as possible. If they for some reason decided that the current "meta" used by so many players is bannable, they'd announce it, to make people stop before they're banned.
Yes, "death abuse is being actively banned". But "abuse" means, for example, repeated suicides faster than humanly possible. This means using hack tools to auto-die. Yes, that's bannable. Not because of the suicide but because of the hack tools.
Now, they could be mistaken in their assessment of what is "humanly possible". It may be that they didn't take into account whatever clever Rebooters figured out regarding optimal maps and procedures for doing it. If that's the case, they'll need to investigate ban appeals until they find out what the fast-but-still-legit procedure is, and change their auto-ban to not trigger on it. But being mistaken does not mean it's intended to ban people just for repeatedly killing their characters.
As for GM chat responses - unfortunately some GMs know very little about the game and have a very small list of possible responses they can give, which can be misunderstood. The subreddit is full of examples of GMs saying things that are patently false, on any number of topics. I would not take anything from a chat or even ticket response as official policy.
Magnificent Damien souls are worth more than 10b meso in Bera's Auction House. I can't imagine anyone was planning to toss one out.
And non-Magnificent souls are untradable.