So, I have never reported a message vulgar, judged a message nor been accused of being vulgar. So this mechanic is new to me. With this in mind, I want to be sure I understand it's purpose, function and IC relation. Correct me if I am wrong, but this is what I gather from this conversation:
Purpose:
A means to encourage players to play their characters in a way fitting for a noble or, at the least, ensure that characters that are intentionally played as vulgar face realistic loss of honor while simultaneously gaining realistic repute.
Function:
If my character receives a message he would consider vulgar, click the button. The message is sent to another player (what is the criteria for who receives the message?) and if they agree the message is vulgar, the offending party loses a point of honor. Either way, news spreads that the offending character has tenancies that some consider unfitting of a noble. It is judged by characters, known by characters, spread by characters.
IC Relation:
If a character clicks on the vulgar button, it is as if he had talked to others within his social circle about how vulgar he found the offending character's words. News of this spreads. The fact that some random character receives a copy of the letter represents how the offending characters words have spread, with the aid of the reporting character.
If this random character agrees that the message is vulgar and clicks the appropriate button, it is as if he says to those around him, You would not believe what this guy said! Such words are terribly vulgar! This suggests that news of the offending characters deed has spread and that many find his words vulgar and results in a loss of standing.