A sub setting that tracks IPs and impacts a person’s reddit account(s) or use.

Reddit admins haven't said how it works, I'm sure IP address is a factor in the algorithm but calling it a "IP ban" is misleading.

And mods can at the very least flag IPs that get banned

It's a subreddit setting, moderators are not flagging anyone's IP addresses, they don't even have access to that type of info. The best that moderators can do is ban accounts for "ban evasion" or whatever other reason. Then those banned accounts and their post/comment histories likely get sent into that ban evasion algorithm when the sub has the ban evasion setting enabled.

You're talking about a setting that has been enabled sitewide for over a year now

https://www.reddit.com/r/modnews/comments/130vnbo/ban_evasion_filter_coming_soon_to_all_communities/

and admins won’t actually follow up with the issue.

Sometimes they do, but yeah you're right usually there won't be much of a review. They do review that stuff on and off but with the sheer amount of actual ban evasion on that site it's unlikely they spend much time on that.