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What is the mechanism used by websites like HBO GO to detect HDCP bypassing/violation? How foolproof is this mechanism, as the logic lies on the client side?

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It really depends on the device where the app is running (smartphone/tablet, set-top-box, smart TV...) but typically the detection happens in code running in a CPU mode (and using reserved memory) that cannot be accessed by regular apps. The most typical implementation is by means of a Trusted Execution Environment (TEE).

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Before transmitting High Definition content, the transmitter initiates authentication process with receiver and exchanges the KSV. Basically it is having three level of authentication. 1. Authentication between transmitter & receiver. 2, if receiver is repeater, additional authentication, 3 during data transfer every blanking interval.

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