Firstly: vulgar language is relative. What is considered offensive by one person can be considered the complete opposite by others
The things I have been called and the things others have been called are not relative... nothing is ever said that is misunderstood so bad it results in a report...
Second: Plenty of adults play this game. I personally am an adult and swear in my day to day life... It's part of my vocabulary, my vocabulary is rich but also includes words considered vulgar
This is fine, i swear literally all the time because there is no reason to be offended by someone saying "fuck" or "shit" unless it is meant to be insulting towards you. The issue is in this game its never just said as a word, its always an insult... No one will report you for saying "fuck i missed that skillshot" but they will report you for saying "how the fuck did you miss that skillshot" because it is directed at them in an insulting manner.
Thirdly: there are many more solutions I can be applied to those who don't want to hear or see cussing... as a software developer myself I know it would be relatively easy to allow users to define what words they wish not to see as a simple text input taking a large portion of the burden off the developers and management of the game.
There is a language filter and it is automatically on when you create an account.
Fourth: it is illogical to punish people on a progressive scale for using socially acceptable language that can be filtered.
No its not, you aren't necessarily being punished for the words but the meaning behind them... unless you use racial, sexist or intolerant slurs in which case you can be punished just for saying them supposing someone reports you for it.
Being offensive to hurt someones feelings is why you are being punished for saying vulgar words. If someone has a problem with vulgar words, there is a Language Filter and if they turn it off it is on them. Just don't direct those vulgar words at someone in an offensive way and you won't be punished.