The bank does report it if it looks like “structuring”. A business can avoid the reporting by filing a form stating intention of multiple deposits.
Well, according to the fine article: In the Institute for Justice video Hinder claims that she had made deposits at her bank for over 30 years and was never alerted that she would get in trouble if she placed deposits of less than $10,000.
If someone has been using the same bank for over 30 years, then the bank knows exactly what is happening with the account. So either someone at the bank wanted to get even with the business owner, or else this is yet another facet of Operation Choke Point and the Justice Department is leaning on banks to cough up these sort of transactions.