Cppcheck will not find report.xml files in the $WORKSPACE directory. This forces you to create and maintain report file directories inside the source file hierarchy that is checked out of version control. It should allow you to specify a report directory at the same level as the source module directory, just underneath $WORKSPACE.

This is what it should allow:
$WORKSPACE/
reports/
sourcemodule/

Not force you into this:
$WORKSPACE/
sourcemodule/
reports/

This forces you to use updates instead of clean checkouts, because removing the sourcemodule/ removes the reports/ as well.

Supposedly, it will allow the higher level reports/, but only if you have more than one sourcemodule/. The plugin should not place artificial restrictions on your source architecture in order to process the report files.