Not parent, but probably. If they weren't legal, there wouldn't be an issue: Cloudflare complying with the law to block illegal websites would be a non-story.
You don't often see private businesses making decisions like this on the front page of the new york times, but this one is a hot topic. They have no social, moral, or ethical obligation to serve these customers, and one's disagreement with that does not mean we should be forcing individuals to cater to everyone.
A company as large and important as Cloudflare disconnecting a client for moral or public outrage reasons is a big story and they should be watched with a careful eye even if you agree with the outcome.