I think the issue of refund is a bit tricky. If a passenger breaches the terms and conditions such that they are deemed not fit to fly, that’s potentially lost revenue to the airline (who could have sold the seat to someone else). Why should the airline be out of pocket?
However, the decision to refuse carriage may be subjective. If the airline want to rely on that there should perhaps be the requirement for an independent third party opinion, for example the police, who could confirm the facts (for example use a breath test for intoxication, or have witnessed aggressive behaviour, or viewed it on CCTV).