Everton and Forest aren't huge global brands like City though. They're big clubs with rich histories, but they don't have City's resources. Or lawyers.
I agree that they should have the book thrown at them, but they'll just keep everything tied up for so long that by the time it reaches that stage the CAS will say too much time has passed for any meaningful punishment to be issued apart from a fine.
All relegating them is going to do is lead to a side that could have had a shot at automatic promotion having to try through the play-offs, or a side that could have gone up through the playoffs missing out because City are taking one of the top places.
The financial repercussions for clubs affected by City getting relegated are potentially catastrophic depending on how far down the league you send them.
On the flip side they'd potentially all get a day out at the Etihad, and some cash from that but would it be as much as they'd get if they were promoted?
Plus, there'd be all that "Hello, hello, City are back, city are back." to put up with then they do get back to the Premier League.
City will get a fine and a transfer embargo. Maybe a points deduction, but how many points do you deduct for it to actually mean something? 40? 50? Force them to liquidate the club and start again.