What's the point of Honoring people?

To make people feel good about themselves and to be a nice person. I mean if there's an exceptionally toxic or rude player you can report them, but then what about the really nice ones? I mean I wish it was actually just to be like oh hey i think you're an awesome person and this is what i'll do for you but it's more along the lines of a system riot implemented in efforts to reduce the amount of toxicity in the game. It didn't work.

The most obvious effect is that people who get honored a lot, receive a ribbon that is displayed on their icon.

I think it also helps some in identifying false reports.

Basically it's a form of positive reinforcement as well as a method of helping you identify what you do that's positive. Reports are negative consequences for people, it only makes sense to give positive consequences to encourage good behavior. Right now it's not much, but at least it's something.

It's also, I think, a way for people to understand what the community views as positive behavior. It helps give you a starting point for examining what you've done if you want to improve your behavior and attitude but you aren't sure where to start. Say you get honored for being friendly and helpful after a match. Now that you know people have done that, you can think over that game and ask yourself: "what did I do to earn those things out of those people? Did I help bot lane by roaming down there to help when they needed it and the jungle was busy? Did I break the tension of a rough patch of the game with a funny joke and some encouragement?"

It's not much, but it's something positive to show that you're doing the right thing.