This is extremely wild to me.

AMD literally made an "internal cheat" for cs2. This is a widely known guaranteed ban and likely among most people (if you modify the game engine then you get banned). Even with weak anticheat like VAC.

This means AMD didn't work with valve at all on this feature, a feature I assume both parties would be interested in. This would be one of the biggest esport games for the anti-lag feature that amd could advertise as supporting.

On top of not contacting valve, they had the expertise to do this, but somehow didn't realize they would get banned?

Somewhat hilariously there's no way they did this for valorant - that game wont even launch if you have debug tools open (unless amd is so dense they worked around that).

Except they didn't make a cheat at all? They applied smart engineering and reduced lag for players.
yes, by manipulating running code from another process. I'm actually quite amazed no AV software immediately stopped it.
Parts of the graphics driver is loaded into the application process (as a DLL), so it's not quite that suspicious. But once they start modifying the application code itself, that's when the problem happens.
Nit: AFAIU there is no literal modification of machine code going on—instead the import address table (IAT, the Windows counterpart of Linux’s GOT) is patched (the Windows tradition calls this “detoured”, from the quite popular Microsoft hack[1] that does it).

[1] https://github.com/microsoft/Detours