They have a manual review step when you submit a game. Although you're right that they can't catch everything, they can certainly catch obvious things.

I'm sure they mostly just don't want to wind up in court with a lawyer being able to say that they let [blatant example here] get published on their store. So long as they can credibly claim that there was no way for them to tell something was in an objectionable category, I'd imagine they're fine with it.

Their rules, if you're curious: https://partner.steamgames.com/steamdirect