They have a vested interest in playing dumb to that fact. They can't really do so if the content escapes out into the wild and shows up in congressional hearings, lawsuits, FBI investigations, DOJ reports, etc.
Also, any party to a conversation can use the report button to send the unencrypted message to Snap for review. They employ actual content moderators as well, who have made reports to federal law enforcement before.
I mean, pornstars say 90% of pornstars are selling content on Snapchat.
https://www.wired.co.uk/article/premium-snapchat-adult-model...
Do you use Snapchat? Do you have friends who do? It's the de facto communication standard for teenagers because of Quick Add and the gamified nature, not porn.
To say snapchat has no basis in trading porn is to say that pornhub could relaunch itself tomorrow and say "oh sorry we're just a youtube knockoff now, we're not in the adult industry."
Well, it would still say pornhub in the URL, wouldn't it. And it would still be a site whose entire userbase was built on trading porn. That's what Snapchat built and used to grow its userbase, so trying to re-image themselves after getting the money is dubious at best.