Less skilled players can't distinguish better players from cheaters, and reports are usually abused and used in bad faith. Even a good-faith report really just means "I don't want to see this player for whatever reason". It's used as a signal of something in most systems but never followed outright in good games because players get a ton of useless reports.

Players in some games with custom servers run webs of trust (or rather distrust, shared banlists). They are typically abused to some degree and good players are banned across multiple servers by admins acting in bad faith or just straight up not caring. This rarely ends well.

I used to run popular servers for PvP sandbox games and big communities, and we used votebans/reports to evict good players from casual servers to anarchy ones, where they could compete, but a mod always had to approve the eviction using a pretty non-trivial process. This system was useless for catching cheaters, we got them in other ways. That's for PvP sandboxes - in e-sports grade games reports are useless for anything.