It sounds like this sends a report of all Internet usage to someone, not just the porn sites. That seems pretty weird to me and I can get why Google thinks it's spyware. It is easily an app where someone could install it on their spouse's phone without their knowledge so that they get a listing of their entire usage.

To call it as productivity app where it is obviously a tracking app is probably something that hurt your case.

Unfortunately the app is too close to actual spyware such that Google probably would rather close you down than risk this getting bigger.

Maybe you can make changes to your app so that it's not sending everything, just the porn sites and have there be some sort of notification to the user that the report is about to be sent. As it is, from what I can see, it could easily be used as spyware unfortunately.