

Payment processors, such as PayPal. Are private companies and have a wide discretion to decide who they do, and don’t do business with. Just like you as a private person have a wide discretion to decide who you do, and don’t do business with.
A baker has every right to refuse a customer that wants a cake with a swastika on it. So the same rules have to apply to PayPal being allowed to refuse to do business with certain industries. They are not your bank.
If, it was some “religious organization” that got their hands in PayPal. Why would they only stop authorizing payments in certain regions? Wouldn’t it then be applied everywhere?
The fact that it was only in specific regions. Makes it far more likely that it’s due to the legislation in those regions regarding incest. Rather than a moral decision from corporate PayPal to stop authorizing payments to Steam.
Steam did not remove every porn game. They removed those belonging to a very specific category.
Probably because a lot of nintendo games are speedrun on emulators. Since it can be difficult to attain region specific hardware and cartridges that are optimal for speedrunning, they resort to emulators so the barrier of entry isn’t unreasonable.
And we all know how Nintendo feels about emulators.
Not to say it explains how it benefits Nintendo. But it explains why they’re going this route.