How to handle plagiarism on method that does not affect outcome results 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 related to mathematical formulas 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?
There is no such thing as unimportant plagiarism.  And three to four stolen paragraphs is not small.

You did the right thing to report it to the editor.  But I also would have rejected the paper.  There is no place in academia for academic misconduct.  It certainly shouldn't be published.