They don't want customers breaking terms of service, whatever those terms are, and especially when it means the rest of their customers are affected. It's not a single company involved here and they're looking out for everyone else they serve.
I think maybe you're trying to express that under a free market ethical framework, AWS has done nothing wrong here. Which is true, and an insightful indictment of the free market as an inherently liberatory force.
Signal had an strategy, but it involves breaking the terms of service, so that vendor has no reason to comply and put the other customers at risk. Signal just needs to figure out another option. It's a technical issue and nobody is stopping Signal itself. AWS will still host them just fine as long as they follow the terms.
By the way, the free market is what allowed companies like AWS and Signal to exist in the first place, and lets you contributed effort and money if you'd like, so perhaps you should widen your context before throwing around indictments.