How will the Celestial Dragons be punished?

Only the Holy Knights and Gorosei will die.
I don't think killing them all is the right way. They have children too.

I think they'll be forced to live with Commoner because Luffy wants to destroy Mary Geoise and Redline.

We'll see how Charlos works at McDonald's.

The Celestial Dragons will not be genocided. Dragon will prevent that.

The worst punishment a Celestial Dragon would receive wouldn't be execution, but to be stripped off of their luxurious status and live normally as human beings, with a 9-5 job living at an average house. They'd also deal with the consequences of living right next to the commoners who were wronged by their actions, and maybe some of them will develop enough humility to redeem themselves just like Mjosgard. In the end, despite how disgusting they are, Celestial Dragons aren't inherently evil but instead were shaped by their environment, and all they need is get punched (repeatedly) by the true reality they created