The recognition that harassment has ranges of severity, and providing a proportional response to all of it is great. Too many places present a strict zero-tolerance policy on paper, and then are far too lax on enforcement, which leads to jadedness all around. On one side are people that are legitimately upset at the unfairness of the strict policy, and on the other people legitimately upset that harassment isn't be addressed (or both). As a result various people are discouraged from reporting both because they worried about overreaction and because they don't think they will be taken seriously, which is a horribly dysfunctional state to be in.

Not second-guessing the reporter is also much better than the alternative. Even if there is some abuse (like any system has), the fact that the staff can avoid dealing with people they dislike by claiming a yellow will mean that most abuse will be with yellows, and thus fairly inconsequential in the big picture.