ISboxer is actually different from AHK, AHK is a scripting tool that lets you script combinations of Windows input commands. What's funny is it seems mostly used for gaming now but when I first was made aware of it 10+ years ago it was actually big for automatically testing lots of shit like web forms on a web application. One of my first software development jobs the QA people used it to test forms. There's more sophisticated testing software out there now so I haven't seen it used in the workplace in a long time.
ISBoxer uses (I think) the Viewport class in the XNA api to render n number of on-screen viewports, each of which can contain a running instance of EQ. It's not functionally any different than opening up 10 clients on the same machine and alt-tabbing, but it's practically much better because it optimizing the game, allows for much faster switching between screens, and has really nice built in setups for broadcasting or sending key map permutations to n number of other EQ sessions.
To my knowledge you don't get banned for ISBoxer on Agnarr/Phinny, you just get chain disconnected if you try to use it with one client (I've tried just because a single client ISBoxer session is like running WInEQ2 so you get all the EQPlayNice optimizaitons, but they must have a hard check for it so you get chain DCed even though I wasn't using multiple clients), or if you try to log in multiples at once it just won't let the others log in.
As for using multiplicity and VMs, Zane may use multiplicity, HotKeyNet or some other similar software (there's literally dozens) but it wouldn't make a ton of sense to use VMs if you have all those physical PCs. My main PC is decently beefy with a top-end i7, 1080 gpu and 32gb ram but on Agnarr/Phinny if I actually had like 12 computers I'd probably use them over messing with VMs because each VM has a lot of overhead to run Windows and etc. I usually like at least 4gb of ram on a Windows VM running EQ. So for mid-tier boxing it'd be nice/easy but if the autism touched me and I wanted to box 22 I wouldn't want to try and run 21 VMs on my machine, but I could do groups of 5-6 per computer.