Different people have different reasons.

Small group of real prudes: either actually feel this way, or hold various levels of opinions, or are generally ambivalent to sexual content but have decided to construe sexualization with sexual misconduct. It works; no sex, no sexual misconduct.

Then the advertisers cater to those people because they don’t want to get bad press and want the broadest appeal: non sexual things appeal to prudes and non prudes alike: so make everything non sexual. Avoid offense and maximize eye balls.

Then platforms want to attract advertisers, so they make rules and filters that over reach. Afterall if nothing is remotely close to sexual then we don’t chance there being an Ad next to something sexually offensive.

Then the content creators, whos livelihood depends on the unequal relationship with the platforms self censor to attempt to avoid the broad stroke of platform censorship.

The middle ground then becomes vacant. The sexual but not sexually offensive content gets thinned out. So there is less and less of a reason for platforms, or advertisers, or creators to allow, endorse, or create that content.

This is why vocal opinions of small groups hold so much sway today. The cycle feeds into itself as people whos only interaction with sexual content is hardcore porn generally fall into that second “ambivolent but lets avoid it just to be safe”. This pipline then has a complicated but similar relationship on the political side of things.