I did not see this thread until now, but since I review reported posts every once in while, I like to chime in.
Yes, the tagging system in Q&A is very difficult for users. I see plenty of posts that are incorrectly tagged. I don't go and change all of them, since far from all are in my area of expertise.
When reviewing reported posts, I have not seen any that have been mislabelled Sysinternals, but this could be because during the week, I only review reported posts once a day, late in the evening my time. What I do see reported as off-topic every once in a while are posts tagged for the Office product Access, which people think is the right tag for access problems with lowercase a. These I move to a better tag.
But maybe some moderators only think of "off-topic" as "do not belong to Microsoft Q&A".
It seems in the particular case above, you reported twice and it was handled by the same moderator, and the second time he got the clue and moved the post.