I can only think of one reason why anyone would decide to use multiple accounts for a casino site.
Claiming the free spins, bonuses and promotions might be the reason but other than that I can't think of any reason why would anyone need multiple accounts.
It's better to avoid such practices. Just imagine you win a huge reward but you are unable to withdraw just because you had an alternative account on the site.
Well, I can add another very common reason, some people want to be their own referrals. While they play with one account they get some cash on another account... but as you said, it's a double-edged sword, they risk getting caught and losing all the money they have in both accounts.
I don't understand how people are not aware of this rule, two accounts are prohibited in each casino, it's explicitly stated in their ToS. And those who pay attention to various accusations here on the forum could see that most of them got into trouble because of duplicate accounts. So playing the "I wasn't aware of this rule" card is pointless...