https://seomization.blogspot.com/2007/10/cloaking-black-hat.html

They can do anything they want and so can Google.

Google quality guidelines say:
-Make pages for users, not for search engines. Don’t deceive your users or present different content to search engines than you display to users, which is commonly referred to as “cloaking.”
– Avoid tricks intended to improve search engine rankings.

A good rule of thumb is whether you’d feel comfortable explaining what you’ve done to a website that competes with you. Another useful test is to ask, “Does this help my users? Would I do this if search engines didn’t exist?”

Either way, you have already answered your own question:
“Technically it violates guidelines of “don’t cloak”…”

The fact of the matter however is that they do exist. 😉

We’re going through a very similar issue with my largest client. Everyone is worried sick that if we present variations of our copy to humans and googlebot (“flowery text” versus “plain-jane-semantically-indexable-version”) that we’ll get banned. But the text says the SAME THING. It’s just written so that it’s more pleasing to humans on one hand, and more indexable on the other. There is no deception, and no changes in the subject matter.

I’m not at all sure what to do, because it’s not clear how Google makes the final judgement. Do they use an iron fist or a measured, thoughtful approach (like Matt tends to talk about.)

And does one want to bet their main traffic source on the answer?