Can you get banned for using exploits or XP farming in WARDOGS?

Yes, and it got stricter on 30 September. In the notes for Update 0.1.2 Bulkhead says it had been lenient with first-time offenders because it expected Season 1 to have undiscovered exploits, and that That leniency is now over. Players who abused cash and XP exploits, or traded for real money, have had their cash and progression reset, and anyone caught abusing a repeatable exploit now risks a permanent ban without warning.

The same patch closed the exploits themselves: revives are now checked by the server, vehicle fly-through rewards are capped, destroying a half-built structure pays in proportion to its build progress, and pallets deposited into a FOB outside the zone pay less.

The original policy, set out on 12 September in the same post as Patch 0.11, has three tiers.

• Abusing a cash exploit or bug. A timed ban, with the length set by any ban you already have, and your cash and XP reset to 0.
• Making content that teaches an exploit. A video or guide on abusing a system, made with no regard for reporting the issue, is treated as advertising cheats: a permanent ban.
• XP farming. The most serious tier. Bulkhead says it tracks every server an account enters and knows which servers exist to farm XP. Staying on one for more than a few minutes is a permanent ban.

What happened with the Season 2 zone farming?

Confirmed: a day into Season 2, Bulkhead said players who repeatedly drove in and out of the zone to farm logistics XP were getting 24-hour temporary bans, fewer than 1,000 of them, per the @WARDOGS video on X of 15 October. Bulkhead calls it very clearly exploiting. Reported: players on Discord say these bans also reset XP to 0. Bulkhead has not said so. The full story is in Bulkhead drops the blue team bonus and fixes Driver XP.

Where the line is

Repetition. Finding something and then doing it over and over again is abuse; testing it once or twice is fine, and in Bulkhead's words helps its QA. Talking about a bug is fine too. The studio says it is not telling anyone to stay quiet on social media or Discord, only that alerting it to a problem is different from promoting one.

Getting away with it for a while does not make it safe. The post says abusers may slip through in the early stages, and that it does not take long for the backend data to flag them.

Earning it the slow way

Cash comes from matches and teamplay, and how the economy pays covers where it comes from. Levelling is deliberately slow after the Season 1 changes, which the XP per level breakdown puts in numbers. For the week after Patch 0.11, community servers pay a 5% bonus on end-of-match cash, the one boost Bulkhead is offering.