I like to believe it does infact help towards penalizing players who decided to show bad sportsmanship. Going through the forums every now and then to witness threads about people being chat restricted/ banned for toxicity & poor behavoiur- gives me a slight hope that some reports gets through!
I assume you mention that people go unpunished, because you didn't recive the " Well done! Your report has penalized someone" message pop-up. I know your frustration on this one. From what I believe, if the game you reported a player wasn't the game the system decided to act, the message won't show up and we'll be left with a huge questionmark if the player would be penalized anytime soon.
Sadly, there are countless loopholes to avoid being detected. If the system was going to punish everyone mentioning the names you've listed, we'll be playing against bots if (you catch my drift). Your report does however help placing marks on certain players, making it easier to split the bad ones from the toxic ones.
I'm, however, supporting the idea of this thread of yours. I believe aswell that certain words should be given a revalued "offence-grade". We shouldn't be too sensetive about being call'd a 'noob', but when certain players have the needs to tell someone they're thrash/ ect.- the system should defently activate with more impact.
[slayer-jinx-catface]