What is the real utility of this?

You dont get a suspension because someone reported you and got 101 of there friends too do the same

You got a supension because of what the account did. I would advise you take a look at the code of conduct that you agreed too when you set up a account if you dont wanted enforcement action in furture.

Enforcement throughly investigates reports. Group reporting a singular person will not result in a ban but if the investigation finds grounds for a a suspension, then that suspension will be enforced. What the agent is telling you, is that instead of retaliation
with verbal abuse, just report the person or person.

The enforcement agent is explaining that your ban was justified as you used abusive language against other players. In the future, if other players are harassing you the best step would be to block or mute them instead of verbally retaliating. You can
also report these players if they are abusing the code of conduct.

Bans don't occur because of mass reporting.

They only occur if the investigation the enforcement teams shows proof that you broke rules.

The Xbox Enforcement team investigates players who are reported. When they see anything breaking the Xbox Code of Conduct, a punishment can be issued. Even when you ask for a review of a ban, there are no promises it may be overturned.

Retaliation in any form (verbal or text) is what typically gets players in trouble. When you are being harassed, simply ignore, report, block.