So I've discovered recently that instead the moderators and admins doing their due diligence, they'll just ban your IP. I can't wait for this to blow up in their face.
It isn't something a subreddit moderator can use to ban OP's specific IP in the subreddit let alone sitewide Reddit. (OP did not say if they are talking about a subreddit specifically, or if they were banned sitewide)
In fact it's just that random person posting a year ago calling it a "IP ban", the Reddit admins never explained how that subreddit setting works. I'm guessing it's using some sort of algorithm to calculate the likelihood of ban evasion e.g repeated post links / new/unused account / maybe the usage of VPN / Tor IP, that sort of thing. Reddit admins do already sitewide auto-ban accounts spamming links that were already reported and banned prior.