Edit: I'm not defending Google's actions in the case of the Terraria developer's account or any other. I'm saying there are some people who have an axe to grind and right now they are the loudest voices. IMHO Google needs to counteract that by taking real action at a broad scale.
At some point the trolls will win for no other reason than inaction on Google's part.
Question, does take-out still work with a banned account?
No clue, my friend; I am not a Google employee.
No, because banned (not merely "suspended", which you can fix using google tools) accounts are usually banned because of bad content.