They should pay both winnings and deposits. No book in the world has a rule against "Value" Betting. It would mean that no one could ever win sports betting at XYes. All other books pay out in full and then limit the person.
I’m not an experienced sports bettor myself and, as far as I know, no casino has a clear rule in their ToS that prohibits value betting. However, I also know that most of the bookmakers don’t like it as they consider it an exploitation of their system to the player’s advantage, even if it was done intentionally. Therefore, aside from limiting the user’s account, many of them will also void the bets involved.