That’s partially true. Reddit assigns moderators to your subreddit as well and if you don’t moderate in a way they like will force you to remove certain moderators or even ban your community.
Ok, but if they allowed users to do any moderation at all they would be putting themselves in legal jeopardy. And lets be real, 99% of moderation is done by users.
Reddit has always touted free speech, until it hits the news and then suddenly the subreddit they couldn't be bothered to deal with is banned.