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How to handle small unimportant plagiarism when reviewing a paper?

I was reviewing a paper related to my field (computational fluid dynamics) a while ago and, while reading a part of the methodology section where the numerical scheme and the equations were explained, I had a weird sense of déjà-vu. Regretfully, I found out that the author had plagiarized about three to four paragraph from a paper published two years ago. What was even crazier is that the author had plagiarized me, since the paragraph he had copied were from a paper I actually had previously published, thus explaining the feeling of déjà-vu.

I obviously noted that in my review and in my message to the editor, but I did not reject the paper directly. I acted this way since it was in the methodology section and really did not affect the outcome of the result. Was I in the wrong? Should such small plagiarism warrant instant rejection or is it sufficient to point them out and let the editor deal with that?