Ah! You're actually right here- I went back to a report I'd had MCP remove from a board earlier, and it was fully deleted. When I first checked, I had a cached version open in the browser, which is why I thought it survived.
I'm going to flag that the tool description for that operation needs to be clearer about what it deletes, and will submit a separate gap around recovery for deleted reports. Appreciate you for pushing on this!