I dont think this confirms that WhatsApp can ready our messages. In theory it could be implemented as a simple message forward, just as any message can be forwarded in Whatsapp.
No. It means the person making the report has the ability to read the message. Of course they do, otherwise it would be completely useless. You can't stop the recipient from doing something you don't want with the message you send them.
Really? So if a random person decide to report me, plain text uncrypted messages will be sent to WhatsApp?
Even if this does not happen regularly, this means that WhatsApp have means to read my messages, which is scary enough.