Er, it has never been true that subreddits could set whatever rules they want. Many subreddits have been banned for a myriad of reasons, nothing should or would change w/r/t that.
uh what? subreddits can and do set any rules they want within the global reddit terms of service. Subreddits have been banned for breaking global reddit rules.
Up until this very recent fiasco, those rules were much more lax.
Reddit has often banned subreddits and made rules afterwards. A few subreddits don't really break any rules but are unseemly so get quarantined or if small enough banned anyway.
Up until this very recent fiasco, those rules were much more lax.