Well, Bungie knows nothing about you. All they get is some film from the report tool. They don't know if you condone cheating, but if they see you in a Fireteam with a cheater, they assume you do and that you're benefiting from cheating on purpose. They can't really do anything else. It's not a perfect system (especially with people who abuse it and report everyone who beats them), but it's one that works pretty well despite its flaws.