Can it be possible to report user sharing illegal content so they are blocked on whole network, not just on my end?

I know that when browsing user files, the window has that user IP address in the title. Such IP can be pasted into the online whois service (search: IP whois) to return abuse email address of a network operator. Where a report can be sent along with evidence screenshots and steps how to reproduce.

I don't know what you could do yourself outside of Fopnu, but from within the Fopnu network you can ignore them, if you have the permission to, you can ban them from channels you are in, but you cant keep anyone from joining the network. Bad files and bad people can't be helped with a free network.