Modify Custom Reports without Site Modify
The ability to edit reports is based is based on assigned roles. If you create a separate folder for custom reports then you must give the users modify permission on the site so that their accounts are added into the 'ConfigMgr Report Administrators' SSRS role at the root report folder. That's a lotta permission just to edit custom reports. So ideally there'd be an RBA role permission for any report not covered by existing permissions. Really anything that disassociates that ability from modifying sites.
Jason Benson commented
Adding to this again to try to push this up. In large distributed environments, SQL Report generation is done typically by a team that does not (and likely should not) have site level administrative rights. Having this requirement makes the customer have to make a difficult decision of giving people too many rights, or forcing a team that does not specifically have the skillset to create reports to be in charge of that.
If there is a way to remove this requirement, it would benefit large enterprises with a robust RBAC structure.
Marco Cibis (MS) commented
This should also include creating new reports. I agree that "site modify" gives to many permissions to report admins - especially in a large distributed environment.