The flag technically doesn't reduce your rep unless your post goes below $0.00 and becomes censored. The same way your post rewards don't belong to you until after the payout, any increase in your reputation is not yours until after the payout. So the downvotes only decrease your pending increase in reputation.
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if my understanding is correct, your increase in happens immediately when the voting does.
But the net effect is yeah, any post that has a postive payout will also have a positive impact on reputation. I think a lot of the concern about reputation comes from early cases before there was a slider where one giant overkill whale flag on a comment with no upvotes or something would tank someones reputation completely.
Mostly correct. There are a few technical edge cases where it might not be, but not worth worrying about.
For this reason it would actually be a bad idea to separate downvote from rep. The current mechanism is correct, except for the biased icon on the UI.
I have created a github issue a while back and the discussion included whether the UI should tell voters how to vote (I think not): https://github.com/steemit/steemit.com/issues/215
i didn't know that