It does break the TOS, since it does count as breaking it;
"The Imgflip generators can be used for anything that does not violate these terms, but please set any pornographic images you create as "private", and then post them elsewhere if you wish to share. Any pornographic images that are not created with the "private" setting are subject to removal. This includes images that are pornographic or primarily erotic in nature, even if private parts are censored or technically covered. If it's allowed at a public beach or a non-x-rated magazine cover, it's probably okay on Imgflip."
When someone post women in a bikini it's NOT ok (literally isn't since there are minors). But when men post half naked pics of themselves it's "Ok" (it still isn't since the terms doesn't say it's "Only" women)