The way to preserve free speech (really "free promotion" or "free publishing" in this case, as there are other avenues for these videos) is exactly what you say — consequences. Newspapers have free speech, but are subject to libel laws, for instance.

There's no real mechanism to hold YouTube to account for promoting and spreading this stuff, and they are naturally incentivised for that mechanism never to come about. To try and ensure it never does, they're obviously settling for this.

Want "free speech" back? Give it meaningful consequences.