I see where you’re coming from, but the alternatives are either that the law isn’t enforced, or the state ramps up its own surveillance, which is more dystopian to me.

I see this as in the same vein as SEC whistleblower awards, which I’ve never heard described as dystopian. Businesses just don’t have the same expectation of privacy that individuals do.

Is it still "snitching" if the reporter, as the person breathing the unnecessarily polluted air, is a victim of the crime?

Being about businesses only and no individuals makes all the difference in the world. Otherwise it should be seen as dystopian also the fact that you can call the police on your neighborhood because "you heard noises".

I bet that the friction in the submission process was deliberately added to avoid abuses, but maybe it's just incompetence. Depending on the reason, this app can be either good or against the spirit of the rule.