Oh man. Better delete the chat window too.
We do factor in people who report people that seem to not be very guilty as part of the system. It's just not visible to you.
That being said, we are fine with 'bads' reporting people who call them 'bads'.
EDIT: It's bannable because as a certain amount of reports for a summoner accrues, the system eventually puts them on the Tribunal.
By saying he is "fine" with these reports, he is saying he is, "fine" with them popping up on the Tribunal and being insta-punish banned.