If you ban an IP or even an ASN, there could be (many) thousands sharing that same identifier. Some kid will unknowingly run some free game that does some lightweight scraping in the background as monetization and you ban the whole ISP?
For some definition of "common", yes. Some try to be less shady by asking for consent (e.g. in exchange for in-game credits), others are essentially malware.
Residential IPs are extremely valuable for scraping or other automation flows so yeah getting kids to run a free game that has malware seems plausible.
How would that be a false positive? The kid might not be malicious, but they absolutely are running a bot, even if unknowingly. If anything, calling attention to it could help people notice, and therefore clean up such things.
The kid isn't. But everyone else using their ISP that your ASN-based block also blocks is a false positive. An ASN block easily has a granularity of "10% of an entire large country". And nobody is going to take your site blocking e.g. all Comcast users as "oh, we should investigate which Comcast user made some slightly suspicious requests, thanks for telling us".
There are some browser plugins that try to guess what technologies are used by the website you are visiting. I hope the better ones can guess it by just looking at HTML and HTTP headers, but wouldn't be surprised if others were querying some known endpoints.
