Basically mods didnt want to deal with moderating it anymore and wiped it out completely instead - alongside some other MMD artist threads that seem to have not broken any rules. I believe the cause was over Rule 7, though cant confirm.
There seems to be basically no chance that they will allow another general one to be created either - many mods in there have made it clear they dont like MMDs at all, which is fine - there are many things on here that im not a fan of, like the beast stuff - though the phrasing used definetly pissed people off.
Any policy of doing business is their right, since it is, after all, their site. However, understanding what not to do and where to retreat is part of competent management. You can remain principled and unwavering, but you can also remain forgotten in the middle of nowhere - even with the largest companies this has happened, ten years have passed, and younger people have never even heard of them.
I can give them credit at least in that they almost honestly admitted that they generally do not like this part of erotic content in principle and they have always made concessions with difficulty when it comes to this. Already much more honest than most of such answers.
I can generally understand their position. And at the same time, I can not. On the one hand, MMD really adheres to the "modern Eastern vision of eroticism", which means - a lot of questions about the age of the participants due to their appearance and voice. On the other hand, any content with anthropomorphic animals raises an equally dangerous question about the rationality of at least one of the participants in the action and their consent to it - if we are operating with real criteria for completely fictitious erotic content.
Their position, again, does not look like it refers to laws or anything like that - the very specificity of the site suggests piracy and distribution of a lot of dubious erotica. And if this is literally just a position based on preferences and subjective assessment, then again - their right, but then the first paragraph of my message is even more relevant.
To
me, it looks like they really would like to simply ban MMD with some exceptions (which they would also like to allow to a minimum), but they can't or have not yet decided - because, surprise, this is also a very large and active audience (iwara.tv is so huge for a reason). It feels like they are fighting their own greed in a sense. Not in the financial, but in the media direction.