Note that images may be "illegal" for approximately ten bazillion different reasons, and most of those reasons can't be determined algorithmically - from copyright infringement to pornography (famously defined as "I know it when I see it").
I assume a human may review the reports and wields the ignore/delete/banhammer as appropriate.
If I were to build one, I'd ensure I kept a hash/perceptual hash (see phash and friends) of removed images so they'd get put in the queue/automatically rejected as appropriate.
Note that images may be "illegal" for approximately ten bazillion different reasons, and most of those reasons can't be determined algorithmically - from copyright infringement to pornography (famously defined as "I know it when I see it").