How exactly can they remove transactions from the blockchain? I thought it wasn't possible.
Let's say your transaction has been included in block number n and that's the most recent block.
The dishonest mining pool mine a new block on top of block number n-1 without including your transaction. Now we have two chains. Chain A has your transaction and chain B doesn't have your transaction.
If the dishonest mining pool manage to mine a new block and add it into chain B, your transaction would be no longer in the blockchain.