I don’t believe anyone has specifically addressed this yet. In my (somewhat limited) experience, yes - typically a multi-table tournament will have at least one designated complete break in play. In all such tournaments I have played in and observed, the chips are counted by tournament staff at that stage to ensure the number of chips in play is as it should be (and to keep a record in case anyone tampers with chips players have left on the table during the break). I’ve only played in the UK so I suppose it’s possible things are different in the US, but I’d be very surprised if so.
In fact, given that this is so common, I’m not sure why the cheaters thought they could get away with it. If they introduced the fake chips at an early stage of the event, first of all that’s much more likely to be spotted by one of the players or dealers during play (unless you introduce such a small amount as to have no meaningful impact). Even if you achieve that, it would by no means guarantee you getting through to the final stages. Conversely, if you did it later on in the event (perhaps soon after the last chip count), it would be easier to introduce the fakes (though still difficult), but you would at some point need to remove the same amount from the table otherwise you would be caught when they counted all the chips in at the end of the event. So even if they didn’t have the evidence to know it was you, the prize wouldn’t be paid out (as seems to have happened).
The online poker sites have pretty sophisticated means of spotting cheating. It’s not in their interests to rig the games themselves, nor turn a blind eye to collusion between players. For example, if you try to sign up with multiple usernames and take several seats at the same table, that’s not going to work. Sure, you can have a group of players who are communicating with each other privately all at the same table, but that would generate suspicous betting patterns and be uncovered sooner or later.
That’s correct. While in some tournaments, the chips in play correspond exactly to the dollar amount you pay to enter the event (e.g. you pay $1,000 to enter (plus a registration fee), and receive a nominal $1,000 of chips), “cashing them in” at the end would only work if the tournament were ‘winner takes all’ - a very rare format for a normal tournament (more relevant for satellite events). Usually, the dollar entry fee is totally independent of the nominal chips you receive, anyway. When you win the tournament (or are knocked out in the prize money places), you simply claim your prize. But they still count in the chips at the end of the tournament, as I have said, so they are going to notice if any extras have been introduced however good the fakes are.