Personally I play it down. No improving the lie. But unless I am playing in a competition or playing a match against someone I really don't care what they do. People fool themselves in all kinds of ways in life and I don't feel like I need to let it upset me nor make me the enforcer.
this is it -
I don't much let what others do bother me - especially when we're talking about just a leisure activity. And if what I do bugs someone else, then it's really their problem
I like to putt it out and let people know it so they don't pick my ball up and throw it to me when it's close. I really don't care about the 'purity of the game' or anything like that. It's just that, to me, the sound of the ball falling in the cup is part of my enjoyment. I'll also not damage my clubs from a bad lie or poorly maintained conditions. etc etc etc