This incident has made me question how I would deal with a situation where I did have reasonable suspicion. Hopefully I will never be tested as I have no wish to be put in the position and would find it extremely difficult. Equally if I chose not to take action and a similar event had to occur I would struggle to explain it away with the points you make.
You are not responsible for any other pilot's actions. Simple as that. And it is quite unlikely that any action you would take if you did have what you consider 'reasonable suspicion' would actually improve anything. Far more likely that people cause trouble when their 'reasonable suspicion' turned out to be not very reasonable at all.
This
accident need not have been caused by anything that was even illegal. The report, if one reads it with an open mind, is filled with nothing but speculation. Nowhere is it established that the "stunts" the pilot had been previously observed to be flying was anything other than aerobatic lazy eights, which the PA28 is approved for when flown in the utility category. Nowhere is it established that the accident was preceded by a non-approved maneuver, until we have a witness who can tell a 58 degree bank from a 62 degree bank from the ground.
Ill-advised, probably, but not necessarily illegal.
The only two sensible conclusions in the accident report: That the accident was not caused by the irregularities with the pilot's certificate, and that the accident is not cause for any safety recommendations.