When you realise Reddit is moderated by unpaid megalomaniacs and teenagers, everything starts to fall into place. In some ways Reddit is worse than Facebook because it is influenced by anonymous entities with zero checks and balances.
The discourse in many subreddits is invisibly dictated by the moderators.
It's not obvious when you browse posts because everything is organically coming from random people. However, moderators can entirely shape the conversation by only allowing posts that say what they want.
In other words: The moderators are speaking through users, by selectively filtering out everyone else. Many subreddits are also famous for banning any commenters who say anything that doesn't support what the moderators want to see. The remaining unbanned users are effectively curated to echo what the moderators want you to see.
Discord obviously has the same dynamics, but Discord makes it more obvious when you're switching between "servers". Reddit mashes it all into one feed that feels like something organic.
In this case, I suspect the core issue is that the person used the Stable Diffusion trademark, which resulted in Stable Diffusion playing the legal card. The correct response would have been to force a rename of this Discord (if legally obligated), though.