If you provide a Directory Path (Path to a Folder) as the Remote Path, it will create the same directory (Folder) in the Local Path supplied & then downloads all the file inside that Directory. This is how the activity is built.
You can use Enumerate objects & get all the file names loop over it and supply one file path at a time to Download Files activity. (I don’t recommend this)
Let the download happen the way it’s happening now. After the download is complete do a Directory.GetFiles on the Directory (in your case reports) & then you can use the move all the file outsite the Reports folder & delete the Reports Folder. (I recommend this, as it will be reliable & quick)