This solution is simple and good. A developer on the receiving end of a "add an item to this list" bug report has a clear, well-trodden way to do it: update the text file. They have a modern editor that handles big files just fine. They frequently deploy new code to production, including testing it.
Moving to a DB means that it needs an interface in production, because presumably Twitch doesn't let their devs run random commands on production boxes. It means ACLs and a sync between dev and prod. It means another moving piece when Twitch spins up a disaster recovery test.
The full-powered, industry-standard solution is an AI-based spam detector with some sort of lag on blocking (e.g. shadow banning). This requires inputs to train on, such as reports from Twitch moderates, which might need oversight. It requires ML engineers and quality heuristics. This stuff is getting cheaper, but it's a hell of a lot more expensive than an ugly text file.