They shouldn't be able to set terms of how their services should be used?

I think we can all agree this is a poor response and they should give some idea on what the root problem is and how to address it, but to say they just shouldn't ever have conditions at all is absurd.

Yes. Agreed. But on the other hand Apple has taken conscious action to put themselves in the position where you have to go through them to get an attestation if you have customers who use Mac OS. They chose not to trust any attestation other than their own, you cannot choose to have Microsoft, or Red Hat, or IBM, or any other trusted vendor (e.g. https://www.sigstore.dev/ or something similar) attest and verify your software and your developer identity.

Youtube can say you can't use them for political content, anything to do with cars, whatever they want.

You also have choices beyond using Youtube.

USPS is the only carrier for many situations. They MUST allow you to mail firearms, baby chickens and weird vials of stuff. They don't get to opt out.

Either the market is full of choices or the sole provider has to do business with everyone for everything and no longer gets opinions.