I've read from many people that bungie is resetting people who do this, I've even read that Bungie said in their latest weekly update that they confirmed this. But after searching Bungie's site for a while and taking a look at their latest weekly update, the only word from Bungie that even hints at banning people for this is when they said "Assuming youre actually playing, your efficient means of farming Credits will only expedite your trip to the Daily Cap it wont send you to Banadu." on their Sept. 24 weekly update. Technically we are playing legitimately to earn the kills for a challenge, but then we are manipulating our network connections so that it doesn't register on their servers that we completed it, which could be their only excuse for a ban (network manipulation). Otherwise I haven't heard that people have gotten banned for this, unless they are just saying it to scare away anyone who is hesitant about performing this glitch. In other words, no proof has arisen showing that bungie is monitoring challenge resetting or that they are banning people just yet.

Thoughts?

I will edit this as more information becomes available.