I'm going to add what I see as some possible advantages, as a poster, not a moderator.
Currently rumors are not allowed. Sometimes those rumors have value. One came up today that was not harmful, could be construed as a theory except it wasn't presented as one, and might have been interesting to others. If flagged as rumor, then anyone who wanted to read it could do so. Anyone who did not could scroll on by. If someone quotes it before it gets flagged, the blurred will show in the quote and that can be reported.
Granted, it seems there could be entire conversations completely blurred out at some point if the original post isn't caught soon enough, but again, no one is forced to read it. If Fraize can make something where a user doesn't even have to see flagged content if they don't want to, better still.
A second advantage is leaving a post with an unknown source in place until someone who makes decisions can do enough research to find out if it's really OK. Post the link, alert your own post, it gets flagged. Then if someone wants to view the link while it's being decided on, they can. This is for sites that may be new or needs a decision if I understand correctly.
And a third, which is my favorite, anecdotes that are kind of off topic, and relate to a person's experience as to why they think like they do regarding some topic can be flagged and those of us who enjoy those stories can still read them.
A fourth is that when someone accidentally posts an opinion as fact. Instead of being deleted, they are flagged with "no source". Then a reader knows it's not necessarily a fact since there is no source and/or does not have to read it.
Still no victim blaming, still no doxxing, still no harassment, still no illegal content (including copyright infringement) or spam. I'm pretty sure no sleuthing family members or people who are not suspects, but someone will have to confirm.
This allows people to see why a post was flagged. Sometimes if it just gets deleted, they have no idea why because who remembers what you posted yesterday that might have been wrong out of the 54 posts you made?
I can definitely see where there could be issues, but I'll let everyone else report those.