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It depends on the bug; sitting on the finish line during an entire race and then jumping over at just the right moment (or however it's done) in order to get a guaranteed 1st place is clearly unacceptable.

I'm no fan of snaking either, since it amounts to a complete destruction of the game's intended mechanics; it's no longer about general driving, item skills, etc, but suddenly one has to join the obnoxious mechanical left-and-right with their thumb to the point of pain in order to keep up, and all other skills take a backseat to this nonsense.

Another fundamental problem with taking advantage of some bugs, and snaking is included in this one as well, is that it can kill the balance between characters, cars, and levels in the game. Suddenly, everyone has to pick one of the karts and drivers optimized for snaking in order to compete, and the snakers repeatedly choose the same courses to the point of unbelievable monotony, since they know that these are the ones where their bug can be used to the greatest advantage.

When you make something a central part of your strategy in such a way that it ruins the basic balance and core mechanic of a game, that's a problem. Unfortunately, there will always be some flaws and bugs in a game to exploit, which is one reason why online will, for me at least, always be greatly inferior to local multiplayer. If your friend starts pulling that kind of crap, you can call them out on it, or alternatively sock them.

Those who seem so brave in the online world, exploiting little flaws in games in order to win, are undoubtedly great cowards who would never keep that up in a face to face match.