When is a player flagged as a cheater?

Question

I read in the 1.0.1 changelog that:

Players who haven't cheated will no longer be flagged as a cheater.

and I am wondering how a player can be flagged as cheater?

Answer 1

I don't think inventory editing will flag you as a cheater, however, using tools like cheat engine on a server likely will, as it allows players to become literally invincible!