

As much as Steam is free to host what it likes, Visa and the others are free not to work with Steam. You could argue the options available to Steam would be significantly limited by that, but the same argument is being used against Steam now in the Wolfire lawsuit. The argument is that Steam violates antitrust law via illegal tying and other means, making it hard for a user who doesn’t agree with their content policies to switch to a different platform, like Epic, which has always prohibited porn games.
Words are defined and redefined based on their real world usage, so if there were enough people describing themselves as dragons, the definition could be updated to account for that. Denying or ridiculing novelty or unorthodoxy would hamper progress in any movement, be it for religious freedoms or trans rights.