TLDR: "is or would" includes as a subset "would"
In general, US income tax applies to, and accordingly you must report (if required to file at all), all income except for types explicitly excluded by law -- but only income that exists. (You must also report some excluded items, like muni bond interest, even though you don't pay tax on them.) If we tried to enumerate all possible types of nonexcluded income, the list in principle is infinite, but for concretness let's say there are 10,000 types. If you have three types in income in a year (say wages, bank interest, and jury pay) you report those three, but you don't report the other 9,997 that you didn't have.
The wording in the first paragraph is the actual requirement: "are or would be required to be reported ...", covers both possibilities.
Let's say you have a simple deposit account that pays interest pegged to a market rate, and right now (because COVID) central banks in many countries have forced this rate to zero (or even negative) so you don't actually get paid any interest. In past years when you did receive interest you were required to report it, and in future years (if you still have the account) you probably will again receive interest and be required to report it, but this year you aren't required to report any interest, although you would be required to report the interest if it existed. Therefore you must report the account both in the past and future years when you did report interest, and this year when you did not report interest because it didn't exist but would have reported it if it did exist.
In contrast, let's say you have a foreign 'pension plan' (similar to US 401k). At least for most countries (I checked only the model treaty, not the entire list) US does not tax earnings on this account on a current basis, although in future years when you (retire and) take distributions those will be taxed. You are not required to report the earnings as income when they occur, and you don't have to report the account -- not in years when you have earnings (and aren't required to report them) and not in years when you don't have earnings (but if you did you wouldn't be required to report them).
The second paragraph emphasizes that you must report an account even if it has no actual reportable income, but potential income that might have occurred would be reportable. They probably do this because this differs from the rest of your return, where you only include income (and deductions and credits) that actually occur -- and this is how people are used to filling out their returns: most people will continue to do what they did before unless they understand this is different, and for FATCA your reporting must include both accounts which did produce produce reportable income and those which didn't but could have produced income that would be reportable if it existed.
I don't have a definitive reference, but my interpretations of the verbs are:
'reported' -- appears on the return. Most things on the tax return are used in computing your tax (that is after all the purpose of the return) but some things are written/placed on the return that don't affect tax, as noted above.
'included' -- appears on the return and used in computing tax. I.e. this is items of income that are included in taxable income, and deductions or credits that are subtracted from taxable income or tax.
(otherwise) 'reflected' -- doesn't appear as such on the return (including schedules), but affects tax computation indirectly, by altering some (other) amount that does appear. Tax reporting has gotten more detailed and complete over time as automation makes it easier for most people to submit and the government to process, and there are progressively fewer things in this 'shadow' category; offhand I can't think of any that apply here and this might well just be defensive wording to avoid a loophole if they missed something or something might be changed or added in the future.