So let's look at what happened in reality. Almost immediately sub-reddits pop up that are at the very least attempting to skirt the law, and often directly breaching the law- popular topics on reddit included creative interpretations of the age of consent for example, or indeed the requirement for consent at all. Oh and because anyone can create one these communities, the site turns into whack-a-mole.
The second thing that happened was communities popped up pretty much for the sole purpose of harassing's other communities. But enabling this sort of market place of moderation, you are providing a mechanism for a group of people to organize a way to attack your own platform. So now you have to step back in and we're back to censorship.
I also think that this article completely mischaracterizes what the free speech side of the debate want.
No, it really isn't.
Differences:
1) Reddit is super ban happy, and there is no way to view banned content. Ban reasons include slurs, political opinions, as well as no reasons at all.
2) Subreddits are not filters over the same content, they have (mostly) different content.
3) There is a fractal abundance of user-moderated subreddit; yes, there is some bad culture in some of them. This is not what ACX is proposing. He is proposing 2-20 filters, ran by the company, not by volunteers, with a specific purpose and clearly defined.
I really don't see how ACX's proposal can cause illegal behavior or harassment that is not already there.
You're making a false equivalence with reddit, then pointing out reddit has negative emergent properties.
"Reddit has a paid team called Anti-Evil Operations (part of the "Trust" & "Safety" team) which goes around permanently banning accounts for saying bad words. We made automod block them so you don't lose your account for saying a word and getting reported. It's not our rule, it's the entire website now, we're just trying to look out for our people. Sorry."