User blog comment:Miskos3/Fairy Tail 2018 + FINAL CHAPTER Review/@comment-4933386-20170722165332/@comment-7418318-20170723174502

Flare said it in the Ryutsezu Land Omake. They were just questioned and then set free again, since they didn't break a law, only the rules of the competition. The only punishment they got was disqualification and a ban for the next few (three was it?) GMGs.

And later in the Sun Village arc we learned that Raven Tail disbanded, which I take to mean that they did it on their own, rather than being forcefully shut down by the council.

So I expect that the former members went either freelance or joined other guilds.