With regards to wat that derp said to u, hes just straight trolling u and i commend u for being numb to his idiocy. Unfortunately if thats litterally all he sais to u its not to harsh of harassment to warrent a chat ban or 14 day ban. That is unless he started using slurs at u.
U did the right thing for muting, as to why people do this. The same reason why people intentionally feed. The same reason people ninja looted back in vanilla wow. The same reason why people purposely jump off the map in ranked overwatch. The same reason why people swat atreamers.
People are idiots, people are mean, and most importantly people are sadiats who want to get a reaction. The degree in which it occurs in each person varies but humans are just jerks like that no matter where u go.
As for the report system.
The IFS (automated report thingie) is in place to pick up and ban people for using exceedingly heinous speech, aka slurs of any kind whether they be sexual or racial, and some other exceedingly distasteful stuff. If someone is reported and the IFS see that they said a trigger word, its usually a chat ban or 14 day ban depending on how much of a jerk they are. What should be noted is that 1 report=9 so asking for reports does nothing. 1 is all it takes for the game to be flagged. Once flagged he systema locks onto the player and if it finds that the reports were made in ernest (usually after 1-3 gamea or so of beong reported) it issues a punishment.
For things like behavioral trolling, the IFS cant do those since its hard for a ai to tell between legit trolling and someone just having a bad game. But it still flags the game for manual review, so if they are trolling they will be punished, it just may take longer.
Overall, keep muring the derps and try to enjoy playing. Some idiot on the internet shouldnt effect your day, so juat keep staying the bigger person mah dude :3
Also dont hide ur tag. Do wat u want, cuz ur better than randos on the ibternet who wanna pull a negative reaction from u :3