So I think admin/staff shall take necessary actions or solutions regarding those issues with the self-moderated threads and also red tagged members shouldn't allowed to create self-moderated threads except discussions.
What does this have to do with red tagged members?

Sorry but you are talking non sense.
So many people are getting red tagged for something that isn't even close to scamming, I don't see any good reason for that.
To me self moderated topics are only ok for bounty topics and a few other things.