I don’t know the details around this particular situation, but this information is a little incomplete, so I will provide some more info to help clarify.

Reporting a player for any infraction (including botting) is fine, but it should be done through proper channels. The best place to report a player for botting or other exploitative behavior is through our online web form, and you can find more information about that here: http://us.battle.net/d3/en/forum/topic/6246615165. However, reporting players in a public place should be avoided since it can result in a forum suspension. Similarly, the Report > Real-Life Threat in-game option should only be used for situations in which another player has threatened violence or harm that is not directly related to the game world, or if he/she has released real life information about other players or Blizzard employees. Abusing this report system can lead to an account action, so we strongly suggest that you please use it appropriately. You might want to review our online harassment policy for more details: https://us.battle.net/support/en/article/diablo-iii-harassment-policy

12/20/2012 01:22 PMPosted by Zamara

While I agree that correct choices should be made to avoid account suspension, I also believe that your team is out of date on the OPTIONS for reporting a player.

We're looking to add an in-game option for reporting possible botters. Until that's implemented, though, it's best to use the steps provided. :)

12/20/2012 07:01 PMPosted by Drothvader

I really hate to burst your bubble but the online webform does not support reports of this type.

Wrong webform! Check this one: http://us.blizzard.com/en-us/submit/hacks.html