I report them if theyre lagging around and taking no damage but if they arent obviously cheating its not worth reporting them(and as long as bungie has exclusive pvp rewards and timed pvp events people will continue playing pvp while their connection is bad + lets be honest american internet is pretty pathetic overall which is where the majority of players probably are)
Has bungie released info on what the bars mean? Some red bar players play the same as a green bar so either its just a completely broken system or a red bar can be as low as like 100 ping(but then there are yellow bars who lag more than red bars so..)
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I've even seen green bars teleporting