While I like the spirit of this idea, wouldn't the reviewer be incentivized to say "no" to as many claims as possible? This is akin to how health insurance reviews work and, at least in the usa, that never goes poorly...
And by the way, while I'm sure Google should have to restore the account in this case, I'm not so sure Google should have to compensate even for the investigation fee. Because honestly it is a tad clueless to take photos of a kid's privates and allow them in the cloud. He didn't do anything truly "wrong" (in the molestation/ child porn sense), but still should have known it wasn't a good idea, so paying $100 for his mistake and being without his account for a week sounds about the right "punishment."
It is by definition distribution of this material and to have software edge-case exceptions allowing certain situations through is something I can't imagine anyone willing to sign their name to endorse.
It seems from a heartless management perspective that the simplest decision is to walk away from the whole situation, wash their hands of it, and accept this as collateral damage.