Google's policy doesn't say anything about using their services to create sexually explicit content, only using their services for distribution.
> Do not distribute content that contains sexually explicit material, such as nudity, graphic sex acts, and pornographic material. This includes driving traffic to commercial pornography sites. We allow nudity for educational, documentary, scientific, or artistic purposes.
This squares with what happened to the authors here, who were only subject to enforcement actions when they shared the content via Google Docs.
But yes I think the basic idea of being unable to "trust" a free service which has no contractual obligations to you as a user is a given under any circumstances.