Just a followup to this as I have recieved a few more reasons people lost their accounts. The full list of reasons I can guarantee you will get a warning/ account closure are :

1) lay/bet betlow the level where commission would be paid.
2) delete the original bet.
3) Flood the market with bets and updates to the bets every few seconds.
4) Place any bets at 0.01 or 0.02 size. This is the same as reason 1 but even 1 bet at these stakes will get you a warning email.
5) Place multiple bets under the minimum bet size on the same selection. For example It seems ok to place a $5 bet at $1.01 and a $0.20 bet at $100 but is not ok to then also set another bet at $0.20 at $50. If 2 or more bets under minimum bet size are placed on the same horse you are likely to get a warning notice.

I am yet to meet anyone, who places a $1.01 bet and then updates it without cancelling the first bet (who has not violated one of the above reasons) , who has recieved a warning notice. It doesn't mean that betfair will not soon extend their warnings but for the moment if you don't violate any of the above rules you should be ok (unless you already had a warning as this is most likely monitored by a different trigger).