People tend to get carried away in a heat of discussion, but eventually return to the mean of civility after cool-down period.
Other places just impose ban frivolously, which doesn't help long term, bans destroy the community, methinks.
Moderate moderation like yours is the way to go, and I'm not saying it as a kiss ass.
Edit: dang, what moderation tools do you think could be helpful. What part of your job can be automated via ML/NLP?
What is your least favorite, repetitive or time consuming manual algorithm as a mod?
Probably looking through the flagged comments is the least favorite, as well as most repetitive and time consuming manual activity, for all the mods who do it.
I don't flag comments often, but I'll be even more careful now when I do if that's the case.
Suggestion: when flagging a comment, allow the flagger to state which guideline they think the comment violates (I believe both reddit and FB do this).
Flagging a comment takes extra work because you have to click through to the comment. I’ve never done that by accident and tried to only do it for comments that violate guidelines. Sometimes I subjectively feel a comment is trolling and will flag it. That’s not strictly against the guidelines and is a judgement call.
(The worst is when I accidentally hide a story. That’s way too easy to do and too hard to undo.)