I've dealt with reddit's administrators from a moderator side before, and they can just shadowban moderators they don't like. It makes no sense to ban a subreddit for the actions of that subreddit's moderators when they can just remove the moderators that are the issue.

I suspect they wanted to ban certain subreddits, and "the subreddit has toxic moderators" is a good reason to give publicly. Nonetheless, they've always had policies for dealing with toxic moderators that don't involve removal of subreddits.