The newest Minecraft update (1.19.1) will implement the ability of moderators to ban reported players from online play. Not to worry though: when a player is reported, the report will be reviewed by a moderation team, so it won't be easy for users to abuse the report feature.
If a player is banned for inappropriate chat behavior, they will get an on-screen notice upon startup that will include the reason for the ban, and how long it is in effect.
The move to implement online bans is a move to curb bad behavior from those playing online with others, and thus make Minecraft a safe space for everyone.
The Minecraft banning feature will include all online play, including that on private servers. Banned players will also be prevented from using the Minecraft Marketplace. There is a help page, "Why have I been banned from Minecraft?" for those seeking more information on their ban. And they will also be able to file for a full case review if they choose.