The IFS can identify flaming and negative behaviors - although I'm pretty sure that most intentional feeding cases require manual review.
What I'd imagine is the primary reason you may see the IFS as being inconsistent with how it punishes is because you don't get a feedback report for every valid report - just those that immediately result in a punishment.
To use Kei143's description of the punishment system, imagine it like this;
When a valid report is made, the IFS issues a penalty score to a player based on the severity of their offense. Lighter offenses (negative attitude, mild defeatism, passive-aggressive comments) result in lower penalty scores (10-20~), harsher offenses (light flame, defeatism, report-rallying, etc.) can result in higher penalty scores (30-50), and so on.
Once a player's penalty score hits 100, they are issued an appropriate punishment, such as a chat restriction. If the player intentionally feeds, trolls, or uses hate speech or encourages self-harm, or other such zero-tolerance offenses, they receive a penalty score of 300, which skips tiers and results in a 14-day ban if it's the first offense.
You only get a notification if you reported a player and that match in question is what pushed them up to 100 penalty score.
Hopefully that description both does Kei143's description justice (as I paraphrased the fuck out of it), and also helps clear up a bit of the confusion you have.