Doesn't seem to have anything to do with personalization to me, either. It's about "editorial judgement," and an algorithm isn't necessarily a get out of jail free card unless the algorithm is completely transparent and user-adjustable.
I even think it would count if the only moderation you did on your Lionel model train site was to make sure that most of the conversation was about Lionel model trains, and that they be treated in a positive (or at least neutral) manner. That degree of moderation, for that purpose, would make you liable if you left illegal or tortious content up i.e. if you moderate, you're a moderator, and your first duty is legal.
If you're just a dumb pipe, however, you're a dumb pipe and get section 230.
I wonder how this works with recommendation algorithms, though, seeing as they're also trade secrets. Even when they're not dark and predatory (advertising related.) If one has a recommendation algo that makes better e.g. song recommendations, you don't want to have to share it. Would it be something you'd have to privately reveal to a government agency (like having to reveal the composition of your fracking fluid to the EPA, as an example), and they would judge whether or not it was "editorial" or not?
[edit: that being said, it would probably be very hard to break the law with a song recommendation algorithm. But I'm sure you could run afoul of some financial law still on the books about payola, etc.]