It couldn't work for two reasons:
First they would need to create a bunch of content and have the rest of the community vote them up to gain reputation. They couldn't vote themselves up as the curation system will only be enabled at 30-40 reputation.

The second reason is that they couldn't gang up on anybody. If they for example flag one content with 100 flags, their flags will be invalidated with just one counter flag, in turn another counter flag will damage the first flagger's reputation. In that example for them to be marginally successful they would need to spend a lot of time and effort to plan each individual attack and create bots to flag as new counterflag add up to their flags. Eventually only 100 people would be needed to counter their efforts and reveal the content and not affect the authors reputation, and if they flag as each new counter flag manifests, 200 counter flags would punish all flaggers reputations, as they couldn't waste their efforts and flag without counterflags present because that would lock in their flags and count only as gestural flags. Plus the prospect is that 100 flags vs 99 counter flags will only affect the authors reputation as one flag, 1000 flags will only count as one flag, because it's one offense per content, not 1000, and the author would have 30 days to petition enough people to nullify the flags, so if the flags are malicious that effort could be stalled effectively.

In the other situation where they go on a rampage and counter flag legitimate flags in order to damage those flaggers reputation they would become targets of a movement decimating their reputation in no time and curtailing their accounts to curation and content creation only.

Of course those situations depend on them building high enough reputation by creating content and not by spamming, trolling or plagiarizing as that would be easy and rewarding to counter with flags, as policing the community should be, not a tax on voting power.

Tell me what you think, I believe that vests should be curtailed only for upvoting and that is not to say we keep the current voting curve, a flatter more balanced curve is needed, that was the main problem with hf16-17, and downvotes should cost 10x the voting power as you mentioned because they are negative actions overall and should be modeled after the real world where negative bias is evident, not a binary vulcan mindset. People would be incentivized to upvote more and bad actors will be drained 10x faster if they autoflag people.

This will create a whole clique within the community that will be happy to address bad actors with the new system, just the same as the chat channel for abuse, they will be given reports of content that wasn't flagged for justifiable reasons (as disagreement on rewards will be dealt with the downvoting system) and people could foster an environment geared towards reputation as a metric for good standing in the community. The great thing about this suggested system is that people can reverse other's flags or invalidate successive counterflags on valid flags with effectiveness and balance, not by money makes right.