Is this true?

Q u o t e:
I was just informed that it is entirely feasible to be punished by Blizzard for telling someone you reported them for foul language because it is considered verbal harassment to tell them you turned them in.

Is that true?

No, it is not considered harassment by telling someone you reported them, Headly. Though I don't see what good it does, as it only serves to antagonize.

What is very damaging though is telling someone that they were reported if you did not actually report them. What happens is the person who may have violated our policies now believes they were reported. After a few days and the person isn't contacted they think, well, I guess Blizzard doesn't care if I say X. So they continue to use that language.

Other observers who believed that the person was reported think that nothing was done either. This creates a cycle where the language and the frequency in which it is used rises and the apathy to report behavior drops.

Just report them and leave it at that. It is the best scenario overall.