It was not Baha'u'llah but Shoghi Effendi who established the institutional forms for dealing with Covenant-breaking

It is of interest that there has only been a gradual implementation of the sanctions against Covenant-breakers and those continuing to associate with them. Many of Bahá'u'lláh's writings contain passages instructing the Bahá'ís to avoid contacts with the Covenant-breakers (see passages quoted by `Abdu'l-Bahá in SoW 13:19-25). Despite this, Bahá'u'lláh seems to have made little effort to enforce such a teaching. During the whole of Bahá'u'lláh's ministry, there appear to have been extensive contacts between Bahá'ís and Azalís. In the first few years after Bahá'u'lláh put forward his claims, there was a series of open discussions between the two groups in various towns, each attempting to win the other over. Such meetings are known to have occurred in Baghdad, Tabriz, Qazvin, Shiraz, and Isfahan at least. There is some evidence that meetings were held and letters passed backwards and forwards between the two groups until a comparatively late date.

It was `Abdu'l-Bahá who moved the question of the Covenant to the forefront of the attention of the Bahá'ís and introduced the concept of Covenant-breaking. He expressed very strongly his wish that the Bahá'ís should break all contacts with the Covenant-breakers and sent envoys to try to encourage the Bahá'ís to do this. He rarely, however, imposed any sanctions upon those who maintained links.

The principal change that Shoghi Effendi introduced in the method of dealing with Covenant-breaking was to enforce the policy that whoever maintained links with Covenant-breakers himself or herself became a Covenant-breaker. It was also Shoghi Effendi who established the institutional forms for dealing with Covenant-breaking when he designated this as one of the responsibilities of the Hands of the Cause in conjunction with the National Spiritual Assemblies, although the final decision always lay with him (MBW 122-3).

(The Bahá'í Encyclopedia entry on "Covenant, The, and Covenant-breaker", by Moojan Momen)

https://bahai-library.com/momen\_encyclopedia\_covenant/