Can you please point out where it says that?
I don't see it on any of their terms. I did see in their terms that you can't have obscene content that would violate any US Laws and the only pornography it mentions is child pornography.
Whenever we purchase further hosting accounts with them. It's always asked, "Can I host pornographic content on this server for public viewing." The response always received is "As long as it does not violate any local or federal laws."

But I didn't see that in their terms. If you look they were also updated on 1-13-2009.