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Rules Related to "Chat" and Interaction With Other Users. Communicating in-game with other Users and Blizzard representatives, whether by text, voice or any other method, is an integral part of the Game and the Service and is referred to here as "Chat."
Flagging you as AFK can be argued as an interaction with you and it is a disruptive effect. You can block most types of harassment with a /ignore. You can also block guild charter spam and duels with native UI settings. You can't prevent someone from flagging you as AFK.
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Rules Related to Game Play. Game play is what World of Warcraft is all about, and Blizzard strictly enforces the rules that govern game play. Blizzard considers most conduct to be part of the Game, and not harassment, so player-killing the enemies of your race and/or alliance, including gravestone and/or corpse camping, is considered a part of the Game. Because the Game is a "player vs. player" game, you should always remember to protect yourself in areas where the members of hostile races can attack you, rather than contacting Blizzard's in-game customer service representatives for help when you have been killed by an enemy of your race. Nonetheless, certain acts go beyond what is "fair" and are considered serious violations of these Terms of Use. Those acts include, but are not necessarily limited to, the following:
(i) Using or exploiting errors in design, features which have not been documented, and/or "program bugs" to gain access that is otherwise not available, or to obtain a competitive advantage over other players;
(ii) Conduct prohibited by the EULA or elsewhere in these Terms of Use; and
(iii) Anything that Blizzard considers contrary to the "essence" of the Game.
AFK reporting you can easily be justified as an exploit of an error in design (unintended use of the AFK mechanism) to gain a competitive advantage over you. They earn honor and you get stuck with 15 min deserter flags.