Foreigners owning land through schemes

I'm in Kho Phangan enjoying a long vacation. I have met countless foreigners (israelis mainly) and they've been buying land by setting up a company with thai nominees. Sole purpose is to buy land.

Totally ignorant to this, but i got curious because they make it seem like it's a great oppurtunity with great returns as so many tourists coming here also staying long term.

Rents are over the roof and land prices offer ROIs westerns will never see in their countries. I get that but

A quick search showed me how it's a totally illegal scheme and a loophole. So I am just confused how it seems like everybody is grabbing land which could then be confiscated. But i have only been hearing people relaxed saying that's been done forever and in their eyes there's no issue...

Are this people just taking the risk hoping nothing happens? has it been going on forever? why govt not doing anything to stop it?