Hello Steve
Hi, I'm Karl and will be happy to help you today.
To focus on your specific question
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Is there any filtering on Microsoft's side? If there is, why is it not working... if not working why report the phishing emails??
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There are a number of different facets to your question
#1 - When everything is working normally, the emails reported are reviewed which results in the Outlook Junk filter getting regularly updated. It is not something that is done based on one person marking an email as spam/phishing.
#2 - Would also like to point out that there is a world of difference between a "phishing" message and a "spam" message. The former is focused on a message trying to gain personal information. Far too many people incorrectly mark their messages. A "spam" message which is essentially one providing unwanted advertising is not a "phishing" message.
#3 - All of this is complicated bu the fact that it seems that the current Outlook.com filter appears to be broken just based on the number of people reporting Junk mail going into their <Inbox>. That unfortunately is something that only Microsoft can fix. Unfortunately, none of us work for Microsoft as this is a user-to-user support forum so have no idea when that will occur.