It's not a mere technical distinction, though. It is a substantive one. Mutes vs reports is not just a difference in terminology, like using the technical term "kind 1984, as defined in NIP-56" rather than just using the non-technical term "reports." It is a difference in function and purpose that makes them entirely different things. You were not being "non-technical," but rather careless in your use of terms if you said mutes but meant reports.
It's also not "any 5 idiots" that can have control over what you see. It's only 5 idiots that you made the choice to follow who can cause posts to be covered with a warning (which you can readily uncover), and you can change that to be any higher threshold of idiots you want, or turn it off completely. You cannot legitimately characterize it as censorship if the end user always maintains control over what they see and can adjust it to their preference.
You may not like it, because you don't have control over whether others see your posts, but that is not censorship. That's just people making decisions about how they will curate their experience on Nostr. And again, it's not just any 5 idiots who can cause your posts to be covered for other users. It has to be 5 specific users who all reported you, and are all being followed by one user, and then only that one user and others who follow the same 5 users who reported you, will see a warning in the place of your post. A warning that they will probably tap to show your post anyway, because they are curious why it was reported.
This functionality is NOT an example of censorship. It is a legitimate tool that users can leverage to curate their experience so they only see the type of content THEY want to see. If it was something that could not be turned off, or could not be adjusted to the user's preference, or that the user might never be aware was happening because the post was just hidden entirely, or if it not only applied to people who use Amethyst, but to all Nostr clients, then you might have a leg to stand on. None of those are the case.
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While these are good points you're making, this little debate you two are having is blatantly trivial, imo, due to the fact that Nostr social clients (save for a very small handful) have effectively stagnated in terms of improvement. As The Beave put it, "It's just stupid at this point."