It Bans the poster Permanently, but doesn't delete the user record. This is good because it blacklists the email address the spammer used (not that they don't have more than one email account, and assuming you use email activation/verification in your forum).
Edit add: As an aside, by keeping the user record it keeps the IP(s) so when investigating spammers it can help. I've used it to ban IPs when a bunch were coming from the same one.
You can use the user group options/permissions for banned users to do some stuff as well.
However, should this mod be updated I'm sure an option people would like would be one to delete the entire record.
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