Process Report Formatting Date Problem

Strange, same expression works if I test it in an Unnamed rule.

You can use text() instead of datetext, it will work

The real answer here (as hinted by the documentation provided in Stefan's prior answer) is that the functions allowed within Process Report expressions are a very slim subset of all available functions - almost no newer ones, and nothing that uses keyword syntax in an input.  You can call expression rules, but any rule you call has to abide by this constraint as well.