This seems a bit unrelated but I'll chime in with my opinion.

Unfortunately for some types of games (first person shooters), a modified client can be game ruining for other players. For me, as long as it's only running while the client is running, and doesn't send private data remotely, I'm okay with it.

At least on Windows there's not much difference in terms of privacy of something running in the kernel vs userland in the same user as your important documents. It can read your entire filesystem and attach to running apps anyway without needing kernel access. So the "in your OS kernel" part is only concerning if their anti-cheat is coded poorly enough to cause a BSoD.

All wonderful. Except the anticheat doesn't work and only active moderation stops the game from being ruined.

It prevents the more amateurish cheats, which by itself reduces cheating in the community by a lot. Obviously in these kind of games, active policing is the only way to find the most sophisticated cheaters. But the anti-cheat does help.