Does ZOS actually punish toxic players in this game?

P.S. Had to delete the previous post as I forgot to hide IDs.

ATTENTION: This is a long read!

I've been playing ESO for almost 2 years on different accounts. Right now, I am playing on a completely F2P account, even without ESO+ (I want to challenge myself and farm gold to purchase all the DLCs without paying any real life money). However, I have 3 more accounts with all the DLCs purchased with cash. But this is not the point.

One of the ways to earn gold in game is to convert transmute crystals into gold and for this, one of the best farming spots is a daily BG. Here comes the story:

As always, I joined a random BG and as soon as the group formed, this person started being arrogant and hateful to other PUG members. He/she requested to leave the BG with our 20k HP sets. I understand that this is the PVP instance and playing with PVE set is not good, however this is the random group and my char doesn't have PVP armor just yet.

Anyways, he/she continued insulting for which I responded "to form her own comp and play with players over 20k HP" and here it comes. This person started being arrogant, as if the rest of us are some kind of low-level people and he/she is the mightiest of us all. Stopped playing and wasted everyone else's time (it was a deathmatch), and etc.

Obviously, I reported this player with as much explanation as possible in an in-game report window. However, I have a question:

Does ZOS really looks through these reports and does anything against people like these?

Also, all ESO players have the right to enjoy the game and play in a way the one wants. We are all equal in terms of rights not only in the game, but in RL as well. Why people like these should affect someone's joy and happiness from playing this game?

ZOS, I really hope you look through this case and proceed with according measures.

P.S. I mean no harm or have no hate towards this player, however I really think he/she should take some time off playing and breathe fresh air.