So right now, there's no reason to report most bugs because 70% the time you don't get any reward. When you do get a reward, it's usually the old pink cape that everyone has and you can't even wear outside without putting a target on your back.
So how about this: for every new bug reported, the one reporting it gets a blind bag containing one of ten cosmetic items. Some items would have higher odds of appearing, some lower. It would keep people interested because they would need to report lots of bugs to collect them all. Since getting these bags wouldn't involve trading real money, it wouldn't be breaking the anti lootbox law. Maybe bugs regarding siege or PVP could be worth two bags since such bugs can be used to kill characters or smash villages.
New stuff would be ideal but simple recolors of existing items would probably be enough, if the devs are feeling lazy.