If I had my druthers and could point a magic wand at the code to make it so:
-Reacts would display like discord/the tally way it used to work, hover the each react displayed to show the usernames, and for formatting where the number of different reacts exceeds the size of the bar they're placed on, a little ">" or "^" at the end of the bar, kind of like how windows hides system tray icons to show the rest in a pop-out.
-For actually reacting, I do like the idea of top level categories (like, dislike, neutral, gimmick?, for example) that expand into bigger categories kind of like Null suggested with option 1, as I think that makes the most sense for helping people know what their react means as far as things like the highlight system.
-As for the available reacts, I like the idea of some customs, but I don't like the idea of putting the whole ass unicode character set in for use, at least for Kiwi Farms. What we've got is pretty good as it stands.
Related to react system, but not as relevantly:
-Speaking of the highlight system, since reacts and highlights are kind of intertwined this is kind of related: if this is not already a feature, it would be nice to allow mods and/or some class of users to manually highlight a post if reacts don't get it there on their own. I've certainly noticed over time that sometimes the most informative and highlight worthy posts with regards to the subject of the thread don't always get highlighted, however the posts in response to those posts often do as some of those responding posts and spicy memes are pretty good, but that's a slight issue for someone trying to get caught up quickly without missing important information.
-From a "license the software to other people for dinars, dollars, or pounds fucking sterling" perspective, I think it makes sense to permit feeding in whatever character sets or custom react packs they want, and then allow admins to categorize reacts into buckets (like, dislike, neutral, or just allow them to create buckets and "values" for reacts within those buckets themselves) if they want to.