I am not saying a product like this shouldn't exist, I am just saying that CF making this offering is bad idea to CF, they are infrastructure company that now decided to participate in culture wars as if it was a PR company...
Given the wide availability of "open source" models (in quotes because, while they're freely available, I don't believe they follow in the same spirit of true open source, with reproducible builds, etc), you can build an AI/LLM to do whatever you like, whether it's illegal in your locality or not. CloudFlare's customers want some sort of functionality to put guardrails around their LLM deployments, and they are offering it. As you say, companies that contract with CF are "allowed" to use this tool; CloudFlare is not mandating the use of the tool.
Is infrastructure truly neutral? If so, you should read about how the Taliban (owner of the .af TLD) unilaterally deregistered the domain name `queer.af`. CloudFlare has famously deplatformed the Daily Stormer.