But it would also be that, or face sanctions and lose their users, or shut the service down. They simply chose the trade-off, and lose some reputation.
Except they have freely admitted that they
aren't facing sanctions and that are no laws or regulations forcing them to start censoring their users. They are doing it voluntarily to make more profit. They could either have continue to operate as they did, or they could have spun up an anonymous coordinator. Either way though they would make less profit, so they decided to sell out their users to line their pockets instead.
It then makes logical sense for them. They want to provide their services to institutions who merely want a mixer/tumber, but without "the taint".
Taint only exists because institutions like Wasabi perpetuate this nonsense.
From their perspective, yes, and not only their users, they're also protecting themselves from being sanctioned.
They aren't protecting their users from anything. They are selling them out for their own benefit.