Veritas Enterprise Vault 12.2.0 R1 requires SQLXML 4.0 or greater. Without this reporting cannot be configured. Unfortunately, SQLXML 4.0 is not supported on Windows Server 2012 R2. This is most widely used server operating system as of December 2017. Many customers want to have reporting configured. Especially the ones that use EV File System Archiving. How do we get ther EV reporting feature to work in a Windows Server 2012 R2 environment?
I'm pretty sure you're mistaken about this not being supported. I just downloaded SQLXML 4.0 SP1 from Microsoft's site and installed it on a Windows 2012 R2 machine without any problems.
The error in your screenshot shows up if I try to install the version for 32-bit OS (sqlxml_x86.msi), which is not surprising since Windows 2012 R2 does not have a 32-bit variant. But if you use the 64-bit version (sqlxml_x64.msi), it installs and works just fine.