I doubt the concern was fraud risk. Fetlife has been accepting cards for long enough that they should have data on the Fetlife fraud rate specifically, so wouldn't have any reason to blindly apply a sex=>fraud policy that they would if they Fetlife were applying for the first time.
It is probably a legal risk from laws that hold them liable for certain merchant behaviours.
This is the second place you've made this objection (fair enough!) but I'd rather not repeat my rebuttal, so here it is:
This is part of a broad effort to moralize what we are allowed to buy and sell online.