That being said, as a teen I loved Ultima Online exactly because you could steal from players, block them, kill them, loot everything, kill their horse, steal the house key and loot the house, steal their boat etc.
The thrill was amazing because it didn't happen all the time. Might be you are on a guild trip and a group of other pass by and kill you all. But often it did not happen, or you needed a couple PvP savvy people with you as escort.
When they later split the world into a PvP and PvE mirror, the thrill was gone. The PvE world was boring and the PvP world was only full of people attacking you anyway (actually it was awfully empty but the couple of guys you met wanted to strangle you)
That seems like the weakness in someone's naive weekend-ware implementation, but is there a reason it cannot be improved?
"But in games you are forced to interact, either as co-op or opponent."
The typical response here is to give players a greater degree of blocking and selection, which I find to be particularly unappealling as it becomes a case of "whack-a-mole". Similarly muting toxic players works the same way, you have to expose yourself to it to find out if you want it blocked.
For me, I'd opt for an option that is muting/deafening myself. Allow me to say I don't want to interact or be acted upon and have that apply globally. There is never an instance where I'd turn this back on and have these set throughout the duration of the game (I.E, I can't turn it back on, just to emote my fuck you and block the opponent from replying.)
My ideal scenario in multiplayer games is to have the skill and randomness of human players without any of their personality. Games that do this reasonably well are games like PUBG, where I can mute the mic and there is no text chat. Similarly the game is frantic enough that taking the 20 seconds to emote your way to some obnoxious point backfires more routinely than not. (However I'm not a fan of the fact they have just introduced emotes... it bodes not well.)
I think because of this there is a class of "not-multiplayer" online game players who want all the game play aspects that multiplayer has to offer, but none of the interactions. I'd sacrifice the respectful people matching rewards (and you're right, it's awesome when that happens) if it meant getting rid of dickheads. But that is up to the individual.