CF could have said to KF "For various reasons we no longer wish to do business with you. In 24 hours we will stop redirecting to your servers. Please make appropriate arrangements." Had they done this, they would not have actually been censoring KF. They would also have been behaving like a responsible service provider by not cutting off service without notice. Instead, they seem to have made the decision to do this…
No, Cloudflare isn't obligated to continue to provide services to support "potential criminal acts and imminent threats to human life". Perhaps if KiwiFarms had better moderated their content and discouraged such behavior this could have been avoided.