The 'Naughty Boy (or Girl)' flag is very widely used in national motorsport, at the very least in the UK. One of my favourite radio calls ever was "Chief flag, show the black and white flag to the entire field" in a club race
In that sphere, there's a difference between a bit of a squeeze where both drivers continue and no positions change, compared to a square hit on the rear making a car run wide and lose position. The first gets a B&W, the second may get a penalty *but* mostly only if reported by the nearest observer(s).
If a driver gets a B&W and then repeats the infringement, they get penalised. It's a pretty simple rule to understand, and yes it does get used by the drivers sometimes. It's a bit like the "kerb strike" rule used at some circuits in Supercars, like T1 and T2 at Adelaide where the drivers saved them up for the last few laps. Rules is rules!