Disclaimer: I dislike 2b2t, but the video does go over a harmful effect that these rule enforcements bring which is that all the harmful players on 2b2t will find other servers to play in instead of containing them in a place that the average player will never think about.
But also 
for drawing swastikas in response to getting told to not make hate symbols.
Also the minecraft EULA has always been the most confusing document to read. They're even being sued in sweden for it.
They basically have infinite powers until they decide to use them, which is what Microsoft wants to do now.
Don't buy into proprietary software, this will always happen. There's a libre implementation of blockgame called Luanti.