There is _some amount_ of justification to ban TXT. There have been a few cases of C2 servers using DNS to send instructions to malware, so letting TXT slip through the cracks would still allow for that.

Now whether this downside justifies the massive problem it causes on false positives...

TXT can't be banned. There are several RFCs that require TXT records, such as DKIM configuration, DMARC configuration, and it is extensively used for verification by things like AWS SES, Microsoft Office, and all kinds of things. It's built into many standards and used by all kinds of other entities for all kinds of perfectly legitimate things.

yes, but in that cases we are on the "this (should) involve a criminal investigation" level not on a "Google Safe Search" doesn't trust you level