Start rewarding people for not being Toxic you might see a change.
Does getting honored by team mates reduce your the flags on your account when you're toxic? If no I don't see why not.. If you are friendly and nice you don't get jack crap but a ribbon if you get like a thousand honors in a row but if your toxic in a few games you get punished.
In the real world we reward people for being good, here you only reward people for bad and even then not all of it is bad your automated system just treats it as such.
Start rewarding people for being Good in a game where it's #1 on the toxicity level of any other game.
Hell even in Prison they reward criminals for good behavior and here nothing.. and no a random skin at the end of the year for never having your account suspended is not what I mean.