I don't recall ever hearing about anyone getting into any kind of trouble for leveling of any kind, and I doubt they would start now. If they wanted to discourage this they would have made it public.

And no, getting banned for letting your friend in china power level your character isn't getting banned for leveling, it's getting banned for account sharing. Same with third party programs.

Lastly, leveling via Zolo still works, it's just extremely slow and not worth doing anymore. It got nerfed, not removed from the game.