Handling plagiarism as a TA
This sounds like "I want to punish them but not really". Fact is that these students have cheated even after multiple warnings. You are not teaching little children. Responsibility and accountability are important and adult students should have both.

If you are sure they plagiarized the only correct course of action here is to report them. It is then up to whoever handles such issues to assess the severity and appropriate punishment. 

The students knew the risks of plagiarizing and decided to do it anyway. Giving them a milder treatment now will encourage other students to behave similarly since the consequences become less severe.



Note: are you sure the students copied from each other or is it possible that they are using the same source?