Yeah, I fail to understand what they get out of doing this. Seige is designed somewhat to match you against equivalent teams. If you play correctly at your level you should win about 50% of your matches. And, they should be hard fought, fun seiges. IMHO, the best seiges are the ones that go back and forth and end in a tie. To come in and ROFLSTOMP your opponent because they cannot even scratch you...I do not see the fun in that. Kinda like stomping a puppy for the fun of it. If they want the badges, well there are easier ways to get those than this.
Not that they're point-droppers, but explain PPK.

On the very rare occasions that PPK loses a siege, it's probably because only 2-3 members showed up.
There's a well-known and long-established guild on Reni with approximately 9-10 active members, 5-6 of them OP-geared and statted, that also has 2 or 3 alt guilds affiliated. Semi-active members in each of these associated guilds include alt guild leaders. These 5-6 players move from their original guild to their alt guilds a couple times each day or so, and will do a regular siege and one or two organized siege wars (declared wars). They do this because they 1.) like to beat up on other guilds in the below-1000 point bracket and 2.) like to collect 13 BoTs and 5 winning guild item packages (for the regular siege) if they win. With the declared wars, it's a matter of enjoying the destruction and humiliation of other guilds. The main guild is currently above the 1000-point bracket, the two alt guilds are below it. And yes, they will purposely lose declared wars on the alt guilds to drop their points far enough below the 1000-point level, probably by being no-shows.
If you've gone against any of these three Reni guilds, you will have recognized the characters involved.
I'm sure there are other guilds like this one, on Reni and on other servers. They're not necessarily mercs--after all, these are their own guilds. I know of several groupings like this on Osha, but they're not as blatant with their setups.
Don't ask, "Is it legal?", because under the EUALA and ToS, it is. Ask, rather, "Is it ethical?".
It's not. But then, aren't there other activities in virtually EVERY online game that are legal but unethical?
It might make one feel better to complain about the practice, but that's about it. Nothing can or will be done about it.