Reddit's own guidance on the topic says the presence of profanity could cause a post or a sub to be NSFW.
A moderator toggling their sub NSFW due to the presence of profanity would be fully in line with their own guidance, and I'm pretty sure r/shittylifeprotips had a little profanity. (Hint: it's in the name.)
Reddit is just desperately trying to interpret their rules in whatever way they desire because they're panicking at losing revenue.