No, really that is not the case despite what the internet will try to tell you. The rules, if anything, are actually less strict than in 2004, although they cover the same topics. It has never been ok to use profanity, masked profanity, insults, slurs, sexual comments, hateful conduct, etc. Same with trolling, spamming, and advertising.
It exists because some people can’t follow the rules they agreed to and it allows parents, or others, to block those who are violating the rules. It does not excuse the language or make it acceptable to use.
Mature Language Filter (aka The Profanity Filter)
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This can be activated within your Interface Options: Main menu (ESC key by default) Click Interface > Social and check - Mature Language Filter.
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Once enabled, all inappropriate words in our profanity database will be filtered and masked to appear as jumbled characters, such as ‘*##@&’.
Note: The filter does not excuse the language used. The filter serves as a temporary shield, to help parents of minors and others who do not wish to see it, to block it. Our policies prohibit the use of both clear and masked inappropriate language.
EDIT - on the topic of your post, usually they can give you a sampling of the logs around the time of the reports. I suspect that is pulled automatically for them. A Support Forum Agent here might be able to tell you more.