Note that the MOTD is shown to users who are not authenticated. It's displayed in the client's server list, and is included in the same response that includes the current player count.

I'm still unsure how I feel about this, since M$ can reasonably say that they are providing services that the server (may) rely on (mainly yggdrasil), and they can set the terms for that. I assume they are treating a block from M$ provided servers, which would prevent authenticating users... However, if a server is in offline-mode, then their actions may be moot.

The call to implement MOTD compliance scanning is a bit uncalled for, especially since the notchian server doesn't implement this, and there's no consensus on what is permissible. TBH, I feel the first action should be for M$ to implement a client side filter, where it greeks things they consider objectionable in the MOTD, and giving the end-user the option to opt-out if they so desire.

I don't envy M$'s position here, since they get rap for the actions of others, and have to strike a balance between using their position as an infra provider to mitigate that, and minimizing their meddling with community servers. They assuredly want to avoid the reputation that roblox has gotten.