The intent of my original question, hamfisted as it was, was if the neighbour is informed of the negative effects their IoT swarm causes other users, do they then incur a legal duty to change their set-up / behaviour such that they would no longer do so?
Intent matters. Devices designed to have negative effects are prohibited; deploying an IoT device working as intended within FCC limits is allowed, despite having negative effects on others; deploying the exact same IoT device with the exact same negative effects with the intent to disrupt someone else's service is prohibited.
This particular IoT setup doesn't seem to be causing any prohibited intereference, all the devices seem to be working as designed within the allowed limits and they can work equally (i.e. your device and your neighbour's 120 devices each can get 1/121th of the usage), so the neighbour being informed that you'd like to use more of the spectrum does not change anything.
