Per T95174, moderation reason fields do not support wikitext. This breaks user expectations and make the explanations less useful than they should be:
@Quiddity: Kind of. But there are cases like this on pages about technical matters:
Question about the template...
But running the full parser on edit summaries (i.e. both standard edit summaries, and/or Flow moderation edit summaries) would be a drastic change, and would require a whole bunch more complexity (e.g. having to sanitize interlanguage links and category links and embedded images, etc). If that were to happen, it should probably be done for all edit-summaries.
Whereas implementing the existing limited-edit-summary-parser for Flow moderation edits, would be a lot easier and just bring consistency.
(I've suggested before, that we could perhaps add a few more elements, to the list of things that the limited-edit-summary-parser can handle, and I think that's probably the best way to add any more functionality. I'm not sure if template expansion (i.e. your example) would be feasible though - too many ways it could go wrong! I've started a tracking task at T119681 and will fill it out once Phabricator stops being problematic)