> Every full node can still manipulate the transaction to make it look like they are slashing rather than the person who originally reported the fraud. This is also a "hey why not, its free money" kind of incentive.

Following this logic, stakers themselves are incentivized to just run the software to submit a slashing tx themselves (free money), at which point just having stakers running slashing software is sufficient. And if they aren't someone else will submit it to the mempool.