Who flagged it is irrelevant. The only important thing is that whatever the image was, it crossed a line with the moderator who saw it. The fact that the rest of the images remain shows that they are acceptable. At the end of the day, TOS is just a list of guidelines. The thing that determines what stays and what gets unfeatured is whether or not a moderator will allow it. In other words...we still have no way of knowing for sure what will pass scrutiny and what won't.
But, I've got a pretty damn good idea for about 98% of it: no pubescent genitals, no female nipples, no anuses, no explicit sex acts (even censored), and no nudity with implied sex acts. There's a laundry list of exceptions but honestly, those restrictions still allow for all kinds of bare butts and skimpy/sheer/painted-on clothing for the other parts. That's plenty to work with--there's no reason to push the boundaries any further. Speaking for myself, the whole point is horny content that actually has a place on the platform (based on moderator approval). Watching crusaders lose their minds is an added bonus, but I was having fun posting TOS compliant smut before I even knew crusaders were a thing.
It's irritating that the rules are so poorly spelled out, but the community mods I've dealt with have been patient and forgiving. I also have to acknowledge that whoever unfeatured that image could have done waaaaaay more if they wanted to, and I...appreciate that their approach wasn't more heavy-handed. Frankly I don't even blame the crusader who flagged it. This was one of the exceedingly few instances where they appear to have had a point. If they'd restrict their attention to genuinely illicit content, they'd actually have a legitimate place for themselves here too.