I understand the distinction, but ultimately the reputation issue for twitch would be identical.
"They're opening a porn site?"
"No no, its a separate site for softcore...err sexually suggestive material"
It isn't a win either way, and they'd be entering established markets that already have entrenched businesses and wouldn't have the 'walk through' traffic the video games sections of twitch provide.
Which might actually be a viable niche. There are a lot more explicit websites out there than softcore ones.