Did you know that movie ratings aren't based on any law? There's no law on any book, anywhere, that prevents theaters from allowing children under 18 to view R-rated movies. Instead, the MPAA and the theaters enforce a fairly rigid soft-censorship regime to avoid what would definitely be a legally mandated, government-run censorship regime.
So, while you are _strictly_ correct and Reddit is legally "allowed" to choose its current heavy handed censored approach, they were never really legally "allowed" to avoid it, either.