If someone gets an infraction, but then appeals and the infraction is overturned doesnt this mean the infraction was given out when it shouldnt have been.
In the view of the second set of eyes, maybe. Remember we do have moderators who also can issue infractions. Sometimes the Community Team reviews these and either lets them stand, converts them to warnings, or in increases them or changes them to a more accurate infraction based on the post.
Most of those that get reverted usually are infractable, but are pretty minor or first infractions and probably should have gotten a warning or a PM telling the person to knock it off (we send a lot of those). As a general rule you'll find the community team goes to great lengths to avoid giving infractions and bans (despite opinions to the contrary).
Which brings me to the moderation question. Moderation is actually called 'time out' on the back end (don't look at me, I didn't name it!). The most common use of moderation is for those who have gone over the top and decided they're going to 'take a stand' or 'won't be silenced'. These people are usually at risk of racking up infractions at a lightning fast pace and could probably get themselves banned within an hour. Instead we put them in moderation to so we don't have to constantly monitor that one person, and so that people aren't constantly reporting them (they can't see the posts to report them) and they aren't piling up a ton of infractions.
Most people come out of moderation in a day or two and realize they flew off the handle and could have gotten themselves banned and apologize. For some people it just makes them eternally angry and they start posting, knowing only we can see them, some pretty profane and vulgar things. Usually even this stops in a day or two, but some start making other accounts and trying all over again and this usually gets them the ban we were trying to prevent in the first place.
Even perma-bans aren't really always permanent. If you appeal a ban and make your case ("I realize I went over the top, I apologize I would like to be part of the community again") and enough time has passed you'll probably get a "You're being unbanned but the next infraction will result in an immediate ban and no appeal".
of course we also have ban appeals that throw in liberal use of the word Nazi, communists, and colorful metaphors. Those people are usually turned down flat.