Feedback reply isn't for the buyer, although they might see it.
It's for future buyers to see that you're alright to deal with if something goes wrong.
Report a buyer is a specific feature. While it is possible that the CSR may have involved the eBay's security department, it's always good to report buyers who either attempt to scam you, or who are abusive. It's more something you should do as a courtesy to the next seller because eBay generally only takes action when multiple sellers report bad actors. Even giving this guy the benefit of the doubt, and let's assume he does actually think the item is counterfeit, he absolutely has a right to be upset in that scenario and you're not entitled to him being ultra polite or nice, but at the same time he isn't entitled to behave abusively, swearing, whatever.
If this person does this on a regular basis and has been reported by other sellers, you reporting them might result in their account getting suspended. In which case, the negative feedback would be removed.
eBay has a specific policy about feedback removal when buyers do not follow through with a return that they opened. Granted, this might be outdated info as eBay does change things. If you as a seller provide a buyer with a return label and they refuse to send the item back, their feedback is eligible for removal. Your situation seems like it would be the same thing because eBay closed the case due to the buyer's inactivity after you opted to provide them with funds for a label.
There is a tool to request feedback removal, but I don't know how well it works. You can find it here: https://www.ebay.com/sellerhelp/feedback (you have to sign in on .com).
You could also try the contact us form on this page: https://www.ebay.ca/help/selling/selling-seller-performance/appeal-defect?id=4871
I would keep it simple but the three main points.
- I am asking to have the feedback removed. I understand that I can ask for a revision from the buyer. I do not want to ask for a revision from the buyer because they were abusive in our messages.
- The buyer opened a case and then refused to cooperate with the return. I provided the buyer with a return label via offering to send funds. The buyer refused to accept the funds for a return label. eBay stepped in and closed the case as a result.
- The buyer was abusive in their messages.
There is a reasonable chance they will remove the feedback.
I can't find reference to eBay removing feedback when buyer's refuse to follow through with a return, but I think it is usually mentioned somewhere when you open a case. Protection from abusive buyers is part of eBay's seller protection policy, so if the messages were particularly bad, there is a good chance eBay will remove the feedback.
When people post stories on here about bad buyers, I usually try to take the middle ground and assume it could be an issue with the buyer or the seller. In your situation, it could be entirely possible that you made a mistake and they were righ to at least be upset (not abusive) and request a return. With that said, the fact that eBay was so quick to take your side either means that this person was particularly terrible, or this is something they do on a regular basis and the info the CSR had showed that. So if they were particulary abusive, I don't think you should feel bad about using the 'report buyer' feature.
