Sorry for delay, completely forgot about this.Email Reports:
I also noticed that Quote emails are also using the default XF email template
Alert Improvements by Xon
Alert improvements works fine.
Email reports is indeed bugged, due to bug in that add-on's code. Open library/Waindigo/EmailReports/Extend/XenForo/Model/Report.php, find this
$mail = new XenForo_Mail($mailTemplate, $params, $user['language_id']);
$mail = XenForo_Mail::create($mailTemplate, $params, $user['language_id']);