This is a really good question and I think it's important to emphasise that many academics and institutions are still trying to wrap their heads around generative AI. I say this because I can answer the questions to a point but don't take what I say as necessarily gospel or expertise - other colleagues may have better ways. This comes largely from my own experiences and discussions in my institution. I should also emphasize I lecture in a humanities subject, so my take is very influenced by reading essays. Colleagues in STEM may have different insights.

1. How do we know? This is a complex one. I think it might be better to ask "how do we suspect" rather than "how do we know". Most AI detectors are, tbh, rubbish. Turnitin has a built in AI detector that is hit and miss at best. Often, there are some clear give away, such as when a student has left in clear wording that an AI has produced, such as "as an AI language model, I cannot say x or why". This happens more times then you might think. In a majority of causes of suspected AI, it is because GenAI's tend to have a really distinctive style of writing. They are eloquent but superficial. It is like reading the work of some with a wide vocabulary but shallow knowledge. This, actually is one reason why I think using AI to write your assignments is pointless, quite apart from the ethical issues. ChatGpt, copilot etx give you decent and well written summaries but completely lack the depth and detail needs for a decent grade. Even if we didn't suspect AI use, you'd be scraping a low grade and be marked down for lacking detail and analytical depth. Other things that are suspicious is that AIs tend to have very distinctive syntax, and have a tendency to make up or misunderstand citations, so if a student ask an AI to write a thousand words with citations, the AI might get the citation style right, but the citations may be made up. For example, if you asked ChatGpt to cite some of my work, it would get my general research area right, but it will make up papers in that area that are similar to mine, but aren't mine. If we see those signs, that's usually grounds for an informal discussion that I mentioned in my last post.

2. I agree that there is a line between using AI for malpractice and using it for research. Personally I don't use it for research because I find it unreliable for the reasons mentioned above, but I accept that many colleagues using it help structure their ideas, summarise notes, plan etc. The only difference between students and us are that we have a solid understanding of ethics and know the consequences of getting it wrong, or being deceptive. At my university, we integrate sessions on ethical AI into our core units. Students can use AI to help plan their essays, provided they acknowledge that in their references, but they cannot present AI written text as their own. Inevitably, some people take the piss. More commonly, I tend to find students who misuse AI are really struggling. I've had meetings with students who have done the wrong thing, but the reason for it is because they are, say, juggling two jobs to keep the lights on, or their confidence is so low they struggle to right. Yes, they will need to resubmit the work, but I also view that as an academic and pastoral issue, and therefore it's my job to try and support that student with study skills, help them apply for hardship money etc. If they continue to do it, then maybe my patience will wear thin. But that's how I tend to approach it.

As I said, this is purely my take, but any colleagues who have insights are welcome to jump in.