Who designed this awful report system and where should I report this?

What you have to realise is that your view on it doesn’t actually influence Blizzard policy. It’s what is considered against the rules is when they could potentially intervene.

What is happening right now, is that a player is repeatedly PVPing them, across multiple zones. That’s all. No chatting, no attempts to communicate otherwise or “demands”, no exploiting to force PVP (This happens, on a PVP realm) and its duration being too short to be considered “stalking” or even “zone denial”.

You could report them by checking over the kill log → then manual report but you would get an even shorter GM answer that they will not intervene on a PVP realm you joined voluntarily where PVP may happen anytime, anywhere and essentially not always fair.

Sure, it is a nuisance it happens to them.