Some inappropriate names are actually funny. It's the offensive ones that I don't understand.

It depends on how you are defining "inappropriate".

I have received a temporary ban because someone did not like my character name and saw fit to report me. The name was not offensive, it was not derogatory, and it was not insulting to any person or group of people in any way. It was simply a goofy name that brought me a little joy and a chuckle in a game that I played for pure entertainment purposes. The vast majority of players I encountered in my gameplay had a good chuckle at the name as well. I don't tend to take myself very seriously in this game, and my character names tend to reflect that. This name however was so offensive to someone, they saw fit to report me and create a hassle for an entire raid team, because they could not handle the word "fart". Although, apparently someone in Zos agrees with them because that word is against ToS, for whatever reason.

I don't understand the mentality of a person who is so obsessed with controlling the experience of other players, that they would choose to ruin other people's experience rather than just ignoring or blocking them. If the name is cruel and/or derogatory, I can certainly understand reporting it because that kind of thing has no place in a community, as long as it's a commonly understood word and not some obscure term that only 3 or 4 people are aware of or specific to an obscure dialect. If it's just something someone finds distasteful though, or just lore breaking, then it is none of their business and they need to focus on something else.