It's fine to not support certain use cases because it's too much effort or otherwise too expensive. It's not fine to, as a service provider, tell people that their programs are (and I quote) "wrong".
If you're okay with that then that's your choice, but for me it really turned me off sourcehut.
No, not really, if done politely. Which seems to be the case here.
It also might "work" to use a large crystal vase as a hammer, but it's still "doing it wrong".
If anything, I'd fault sr.ht for having too vague usage policies and then telling users they are in violation of said policies. That's not good. But they are in alpha, so hopefully it's something that'll improve.
Similar thing happened on Github with CocoaPods: https://news.ycombinator.com/item?id=11245652.
Just because something works doesn't mean it is a suitable implementation or a sensible decision.