Three options here:

- Reporting is censorship (necessarily decreases reach)

- Reporting is advertising (necessarily increases reach)

- Reporting is speech (it's complicated)

Reporting can decrease reach, depending on client/relay implementations. It can also act as an advertisment for the reported content (this can expose you to legal risk if what you're reporting is illegal). At its core, reporting is like any other speech. It's a comment with a value judgment. What software and governments do about it is another thing.

Tangentially: be careful what/how you report. Many clients sign reports with your own key, and some even send kind 7 with a warning symbol instead of kind 1984. This is terrible for users, who donc't want to associate their keys with objectionable content.