The new tool permits streamers to share information about who they’ve banned in their channel with other streamers so they can collaborate to help keep known harassers out of their channels.
It works per request. Once someone accepts it, you both share ban info going forward.
You can decide not to share info with a streamer at any time. It is not permanent.
Twitch still encourage streamers to report users who violate their guidelines but hopes this helps simplify the process by signaling a potential offender in their chat.
People banned for fun would also appear on the shared list for those who use community points to do that or for jokes.
However, each streamer can go in manually and select a user as trusted so they can be distinguishable from the rest of the list.
More about this new update on Twitch's safety article.