After a few mission cycles I beiieve this issue has been fixed. Ballistics are not accumulating, server FPS is not degrading and CPU usage is not climbing. It is possible that this was the sole root cause of the ballistics leak and there are no others. If I come across any then I will create a new thread.
So congrats to @Flappie@abelian@Moezilla, the others who helped, and the ED staffers who fixed and tested.
The Bad
While I am happy the issue has been resolved I still believe that ED's handling of this issue has overall fallen short of acceptable standards and I want to go into detail here so that, maybe, things can improve.
Server Owner <-> ED Relationship
I posted this issue on 2022/09/01 however the general issue of a ballistics object leak was known about by the Hoggit admins for a long time before that with posts in the Discord describing the general issue from 2022/06/01. Now I don't know if anything was reported or not but, having spoken to many different server admins, the general concensus I hear is "It is a waste of time to report server issues to ED" along with a general lack of support, debug tooling etc.
This is an awful situation. If a server is having an issue that usually means all the clients on that server are having a suboptimal experience. In the case of this issue it meant players suffering lag, warping and otherwise unfavourable conditions. How many ED customers on the various multiplayer severs have left with a sour experience due to this bug in the course of the 6 months or so it took to resolve it? I am willing to bet that it is thousands of customers and thousands of hours of flying time where customers have been left with a bad taste in their mouth at the end of a session .
My suggestion to ED to improve this situation is:
1. Provide a formal way for mutliplayer server admins of servers with large player bases to contact you to report issues. Either a forum or a discord channel explicitly for communicating issues to ED and collaborating on fixing them. You have stats on which servers are heavily populated I am sure so invite their admons. Admins having to rely on "Try pinging @NineLineor @BIGNEWYand hope for the best" doesn't cut it.
2. Having created this formal communication method. Listen to them and accept that things like "please provide trackfile" is not always feasible on servers with scripts that run for hours with 10s of players on them where an issue may be inconsistent. Work with them collaboratively to try and find the issues which leads me to the last point:
3. Provide them with the tools they need to be able to perform this kind of investigation. I know this has been requested because multiple people have complained to me about these requests being ignored.
The handling of this issue by ED, aka "Cannot Reproduce" & Radio Silence
I am going to go out on a limb here and say that this bug report was about as good as ED can expect without deep-diving and finding the root cause itself. It contained lots of information, it pointed to exact syptoms. It included 4 different trackfiles from two completely different setups. Including an AI only tiny trackfile.
Despite this the response was "Cannot reproduce". But when @Flappiestarted looking into it he appears to have been able to reproduce it from the small AI trackfile I provided in short order.
So the questions that ED needs to answer, at least to itself is "Why couldn't ED staff reproduce something that was reproduced by a volunteer in short order using submitted data.". If ED cannot reproduce things via trackfiles then why should the community spend time and effort to provide them?
My next issue is that, once the "cannot reproduce" status was entered that was basically it. The issue languished for months and there were no updates; I had to literally contact ED staff on discord to try and get an update on what what was going on. Had @Flappienot taken the effort to root cause this I have no doubt that this would still be unresolved and ED customers would still be suffering. This ties into the linked post which I think ED needs to consider a lot more carefully.
rurounijones's post in Invalid Ballistics Objects being created and not cleaned up resulting in FPS impact. was marked as the answer