People turn the Chat Filter off and they are allowing themselves to see inappropriate words. You report someone when you see them use inappropriate words. Why would you report them for using these words In non-filtered chat? I think It's absolutely fine to swear In non-filtered mode. If you don't want to see them swear, just turn the filter on.
Remove the inappropriate language report button. It's inappropriate to have It without chat filter on because by all means, when you disable the chat filter, your allowing to see these kinds of words thus agreed to you don't care about this type of language. REMOVE THE LANGUAGE REPORT BUTTON.

. The Chat Filter is for young people or children. Even though most kids now days are smart enough to know how to turn it off, parents might find comfort in knowing a filter is there. Simple way not to get banned is to leave the potty mouth out of chat.