Your focus on legality to me is completely irrelevant at this stage. People want to discuss if this decision was a good idea or bad idea.
Often, ethics become law. If you care about this at all, figure out what laws you want and organize to pass them.
It actually doesnt matter if its legal or not for them to be doing this. Whats important is for customers be fully aware of whats going on and to make a choice (purchase or not). The opinion of customers will undoubtably shape that companies future decisions.
So companies do much more than obey laws and follow contract or EULA. The respond to their customers and users based on their perceptions and feedback.
Restrictions on free speech and dissent ... or the overwhelming of channels, forums, and archives with propaganda and disinformation ... are both characteristics of abusive, power, regardless of its foundation. The origins of free speech princples emerged in response to religious and monarchical governmental abuses, for the most part (with some role played by lesser nobles and interests).
With numerous commercial firms existing at scales which rival entire countries, the "private property" defence against any and all limitations on censorship simply isn't supportable. That said, a reasonable and principled policy with review, oversight, and appeals processes would be useful. Ultimately I see government regulation as a very likely necessity for communications platforms operating at significant scale.
https://fullfact.org/blog/2020/nov/framework-combat-misinfor...
Eventually you may find yourself on the receiving end, will you think censorship is good then?
The platforms are public and used by millions.
Hacker News itself does this all the time; there's plenty of topics and conversations that aren't allowed to be posted here. And people get banned/silenced all the time. And that's good! That's what healthy moderation looks like.