Unfortunately I can’t take you seriously if you really think this:

Are you telling me the people behind the decision to ban certain mods due to bigotry were holding a stance of “we are more than happy for you to publish your content, just not here for completely unrelated reasons” or are we being serious and we accept the fact that the stance is an explicit “these mods should not exist and we don’t want any part of them”?

The “people behind the decision” are business people who were worried about ad revenue due to being associated with such mods. These people don’t give a fuck about the mod being available anywhere else as long as it doesn’t negatively affect their own bottom line. So yes, I’m telling you exactly that.

But there are realistically always some rules on what kinds of hosted content is allowed on a page. Open racism/transphobia are, I’m guessing, not allowed. Why is this a step too far compared to other cases that go beyond legal limits?

It’s also important to note that 1) they weren’t barred from publishing the mod, and 2) they’re totally okay with using said tool in lots of cases where it was never used before - why would they suddenly care about it?