I don't think I'd host again if turnip exchange gets banned. It makes hosting so much easier, it'd be hard to go back to the PM route. I really don't care if they're violating Nintendo's TOS. That's on them. I can't see Nintendo banning users for this. Anyone can put someone's dodo code into it, even if they're not the island owner. How would Nintendo know if you actually used it or not? I also think they would go after the website more than the users, if they ever even care.
Where do you draw the line for banning things that violate TOS, by the way? Weren't people on here discussing how to create your own an amiibos? How do you know the villager selling threads aren't selling "illegal" villagers?
Also, I honestly don't understand how people get scammed on TE. You can close your game or just don't visit obviously sketchy islands. This goes for all AC related websites - Nookazon, BellTree, etc. It's kinda hard to get scammed on this game.
And with regards of the donations... who cares? I don't donate. I don't understand people who do donate. I feel like your money would be better off in a million other places.