All fees go into the treasury that backs BAO. The treasury funds are owned by the users who vote on their allocation and use, which can include the buying and burning of BAO. These fees only apply to LP assets and not to the harvesting of the BAO token.
Penalty expiration after first deposit / last withdraw based on block
Direct withdraw in same block
Within 1 hour
Within 1 day
After 28 days
The fees are designed to be reasonable for users who want to temporarily yield farm, but penalize users who move out of the system rapidly.