The addition to the legal Terms is new, but the English Wikipedia has long had a norm that you should disclose any conflicts of interest (paid or otherwise), and there have been community processes in place to warn people who appear to be failing to do so, at least when people with undeclared COIs made edits that raised enough eyebrows for someone to notice. You could maybe fly under the radar if you never made controversial changes, but warning templates like https://en.wikipedia.org/wiki/Template:Uw-coi and https://en.wikipedia.org/wiki/Template:COI go back to the early days of the encyclopedia. Some people who were found PR-scrubbing biographies for pay were also community-banned in the past, though those were case-by-case decisions.
While it was certainly not encouraged, you'll note that undisclosed COI was not actually banned, just discouraged. There was extensive and widely advertised discussion in November 2013 [1] about three anti-COI rules, all three of which were shot down. This is not the first time it has come up, and it had repeatedly been shut down.
As for the WikiPR incident, the fact that they were banned has less to do, I imagine, with the fact that they were paid than the fact that they were essentially vandalizing Wikipedia. If they were getting paid to write neutral, balanced, well-sourced articles, I'm sure no one would have cared.
