If matchmaking prevented people getting matched with people they have reported, it would mean increased queue times. Also, at higher levels of play this would result in people getting practically blocked from ever getting matched with equally skilled people, because they would have reports against each other (and their queue times would go to extreme lengths). Something like that was in use in Overwatch for a while. Blizzard removed that once they realized their top players cannot get to match after waiting for half an hour (I believe the usual wait time is a minute or so max).
Even if the report only worked for next couple of queues for example, it would still increase the queue times since it would add more SQL calls to find out the recently reported people and that takes time (even if it takes only one second per person per match making attempt, it means 10 seconds per attempt and if one player is not okay with another, the system would need to find someone else to replace at least one player.. and 10 more checks would have to be done... each such check would add 10 seconds, and those would add up.)
tl;dr: System that would prevent people you have reported from getting matched with you, would increase queue times and would wreck higher levels of match making.