The new system will let players report chat messages in multiplayer games, even in private servers.

A new user reporting system was just added to a pre-release build of Minecraft that has large swaths of the community crying foul. As part of this week's 1.19.1 update to Minecraft, this new reporting system allows players both on private, self-hosted servers and Mojang-hosted servers to flag inappropriate chat messages. These messages will then, allegedly, be reviewed by Mojang and could result in temporary suspensions to permanent bans.

This new reporting system was announced about a month ago and right from the start this system did not sit well with many Minecraft players. The biggest point of contention here is the fact that reported messages may be taken out of context. More broadly, it's a concern of players that this gives Mojang, and thus Microsoft, far too much power over the content and discussions in privately hosted game spaces.

Friends playing on a private server must now walk on eggshells. Imagine a situation where you say some joke in a self-hosted server chat to a group of your friends. Now imagine those friends "jokingly" report what you said to Mojang. From Mojang's perspective, they just received a handful of reports about something you said without any additional context. This is the worry that a lot of players are voicing with this system.

Mojang does include an appeals process, which will presumably help mitigate these sorts of circumstances or false positives.

A Mojang employee recently went on Reddit to say that while the studio values player feedback it won't "change the design principles that Mojang Studios adheres to - this includes the upcoming reporting system." The employee, going by MojangMeesh, continues on in a heavily downvoted post to say that Mojang is "not planning on changing it" when it comes to the implementation of the reporting system.

Second, while we understand this may not be the answer some of you were hoping for, we are not planning on changing it. There have been some folks following Mojang employees around here on Reddit, responding to unrelated posts from them and commenting about this system. Please understand that this behavior does not encourage employees to reach out to the community, nor will it bring about the changes you're wanting. If you feel strongly about something in Minecraft, please tell us in the appropriate locations (such as these threads) because we want to hear what you have to say! However, harassment does not help anyone: not the devs who receive it, nor the players who are passionate about an upcoming change. We want to maintain a constructive and open dialogue with you, and this kind of behavior inhibits that.
A lot of the responses to MojangMeesh's comment were met with heavy skepticism. Users voiced their skepticism about how Mojang "values (user) feedback" by lamenting how the company has had little to no communication with the community for weeks and months. Users have also taken issue with the statement about how Mojang "wants to hear what you have to say" while simultaneously ignoring the biggest issue, this reporting system, that fans have been complaining about for weeks.

On the flip side of the coin is the fact that Mojang will not ban anybody for simply cursing in chat. Mojang will also reportedly not monitor any private server's chat. This is all outlined in a new FAQ about the reporting system.

As PC Gamer notes, Mojang "is in a bit of a bind on this one." They share a Twitter thread from Stuart Duncan, a person who runs a Minecraft server for children with autism. In the thread, Duncan shares just a few examples of the horrendous things that happen in Minecraft servers. Citing reports from the ADL, BBC, and more, Duncan shares stories about racists, predators, and sexual harassers that have utilized Minecraft in some awful ways.

Providing tools to combat that behaviour seems important. While it's true that 'think of the children' scare stories get used to justify reactionary policies in real life, a tool that lets players report dodgy chat messages in Minecraft doesn't really seem like the thin end of a draconian wedge.
Still, even with assurances from Mojang both in their FAQ and elsewhere that most players have little to worry about, the community remains highly skeptical of the new reporting system. A few workarounds to prevent user reports from even being sent out have already popped up for both clients and servers. A separate thread on Reddit talks briefly about a No Chat Reports mod and the NoEncryption plugin as viable options for players and server hosts alike.