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So is this acceptable or should I point this out to G?
For example, they could be using totally different info on the 2nd account. Assumeing they have done this, then although the ad goes to a domain that has a link to the domain in the first account, they could be adding a affiliate id variable, real or not, and respond that they are an affiliate of the first ads domain and thus there is nothing wrong with what they are doing.
I guess it does not hurt to report it, but my experience is it is next to impossible to stop someone doing such as they can just keep doing it over and over as people have on words I bid on.
There would be no reason that I can see for them not to set up an AW account in their own name with ads directly linked to that section of my site even though I have my own ads for the main site in general.
I could see that they could say its just another affiliate doing advertising, but if you do a whois lookup on both sites, they are owned by the same company. Would G look at the whois info and decide that this is not an affiliate but rather a duplicate ad?
Google does not monitor this, nor could they really even if they wanted to, so it is up to you to find the violating parties, gather enough evidence to support your claim and then report it. For those willing to throw up another throwaway page though, it is only a temporary solution.