This is actually one of Twitter legal arguments against this law: section 230 explicitly gives companies ability to moderate user submitted content as they please.

By putting additional restrictions on moderation activities (the requirement to report to government how they are moderating) this state law contradicts the federal law and the way things work, federal law wins.

We will have to wait to see if the judge / juries agree with this argument, but that's one of the reasons Twitter believes this law should be eliminated.