For clarification; yes, it may have sounded harsher than it was meant but then again I really mean it. It was most certainly not meant in a derogatory way.
I do not suggest that Paulo should sit and let the other guy fly into him. The fact that Paulo has seen the other guy is enough that the two don't hit each other.
By making a call on the radio you may put the other guy's back up for a number of reasons.
Rocking the wings is a tradition (apparently a dying one) which has a number of uses. Aircraft can be very difficult to see especially with no relative movement (ie on collision course) so the rocking wings, differing light and shadow or glint makes it more visible.
It also helps maintain the camaraderie amongst pilots.
I'm with Chilli, too.
Just to add that people's position reports often reflect more where they think they are than where they actually are.