I notice someone in my niche has what looks like an auto generated forum, with tens of thousands of messages, 99% of which have only one message. It is now ranking 3rd in my niche. It came out of no-where!
Is Google likely to penalise this type of site? If I report it for spam, would they remove it?
Eventually, yes - such a forum is not likely to continue to rank. Right now it is probably benefiting from a "freshness" factor, which can create a temporary loophoe for spam.
Google usually does NOT take immediate manual action based on spam reports. They do use the reports to understand how the spam made it past the algorithm's current safeguards - and then change the algorithm so it can catch this TYPE of spam,not just this single example.