The Hook registration_errors was not called

You are not using the registration_errors hook properly. It should look like this:

add_filter( 'registration_errors', 'reg_user_register', 10, 3);
function reg_user_register($errors, $sanitized_user_login, $user_email){
    $custom_reg_field1 = $_POST["custom_reg_field1"];
    // add error checking here
    if ( empty($custom_reg_field1) ) {
        $errors->add('custom_reg_field1', __( 'Please enter a reg_field1.' ) );
    }
    return $errors;
}