It's not the whole country, but as a practical matter it's difficult for small companies like Grammarly to determine whether any customers are on the official list of sanctioned entities. Since they probably receive very little revenue from Russia it's safer from a legal compliance standpoint to just block the entire country.

There are also some practical problems with getting payments out of Russia.

This reminds me of an old Russian saying: "It's like trying to shear a pig: too much squealing, not enough wool."