Relevant xkcd: https://xkcd.com/1499/
You cannot fill up your car's tank with soda at a "free refills" place, neither can you camp and eat 24/7 inside an "all-you-can-eat" buffet.
I don't think it's unreasonable to still call those services "unlimited" and let the restaurant/internet provider decide when to drop a customer that they don't want in their premises/on their infrastructure...
If the restaurant sold 'Unlimited Soda, 2 liters per minute, £50/month' I would expect them to deliver on the very specific quantities they promised at the price they offered. If they tell me I'm over-dispensing, I think I'd be rightfully annoyed that they have over-promised.
Instead, Hetzner sells "unlimited bandwidth" the same way McDonalds sells "free refills". It's also understandably unreasonable for someone to start pushing data at the max rate for months non-stop, the same way it is unreasonable for people to fill 50 large cups with soda.
If people have accepted the "...within reason" argument for free refills and all-you-can-eat buffets, why not also accept it for data usage?
False Advertising. Simple as.
And even if you were right, even if it's just a case of false advertising and the provider wanting to get out, there is nothing wrong (neither morally nor legally) for them to unilaterally terminate the contract, which they could have well done instead of writing that notification letter. They explicitly state this in their TOS. Most companies can still (luckily) decide which customers they serve and which they don't