I guess the moderation algorithms of Waze will eventually nullify the users who are falsely reporting these locations?
Probably. They also decay reports more quickly if they're marked as inaccurate as I recall.
I don't really know at what point Waze creates more problems than it actually solves. Just stay alert out there and you should be fine if you're a civilian. If you're a criminal, this is THE go to tool.
Waze shows a lot more information than where police are.
I don't see criminals relying on this heavily. It's not like every cop car is going to be in Waze and up-to-date or anything.
It's near useless as a criminal. It's not as if there are real time updates for cops driving around, its pretty much like a "warning cop in the area" when people pin a cop down. But Waze does a lot more - traffic, road hazards(cars stopped on side of road, accidents, construction), and navigation.