it goes to the mods of the community, the admins of that server, and the admins of your server

this is correct.

i know some have suggested a feature change to Lemmy to allow us to chose to which party(s) the reports go to, but in the meantime the limitation precipitates a sort of gentleman’s agreement among admins (or at least admins that want to remain federated) not to abuse the reports that are clearly not for them.