I will speak from my own personal ethos, rather than the staff team as a whole.
I go out of my way to not accept reports from individuals in my faction, both on the forums, and IG. I have done so maybe 2 times in 2 months. These situations were last resort situations where no mod+ was available and the rule break was beyond blatant. I also have a personal policy to not moderate my own RP (I will fix tire desync for people occasionally and such), but I do that for everyone. Now, with that being said, there have been situations where I have punished members of my own faction on the spot for rule breaches I have seen.
I don't do this because I think I am unable to be a neutral party, I do it because of how it's perceived by the individual who is on the other end of the report. With all that being said, I genuinely believe Mod+ is a role that we, as staff, are not put in unless we have the ability to set our bias aside and deal with each situation as a neutral party.
To add to your counter argument of people not knowing they are biased, and the flip side of that is that just because you think someone is being biased, doesn't mean they actually are in the specific circumstance.
If at any point you have direct examples of this happening, it should be brought through the proper channels to resolve on a case by case basis to either correct, or deny said situation. This is why we have an appeals process. No matter how perfect we all attempt to be, in the end, we are still human.