Because the Chinese market is huge. Because freedom of speech in the Western world is an individual liberty which platforms such as YouTube do not need to guarantee, whereas censorship in China is an absolute requirement they must abide by. The payoffs are asymmetric. If we had legislation in the EU or in the US that demanded that YouTube not tamper with users’ comments, then they’d have to choose between one side and the other. As it is, they’re not legislated as a utility, so they have editorial oversight.
As another user posted, there’s a long list of terms dating back to 2012, so this isn’t recent. Even the post referred to dates from the end of 2019, so it isn’t exactly novel.
Google might well accept being excluded from China, but I’m assuming that the prospect of being allowed to re-enter that market is periodically dangled in front of them by the ruling party in China, and that consequentially Google has an ongoing motive to somewhat abide by the PRC’s rules.
Also, Google may be excluded from China, but Google also has a lot to lose if relations with China deteriorate, for example, if China somehow interferes with the primacy of Android there and therefore causes a massive dent in platform numbers.
Point is, the longer Google can postpone any such occupancies, the longer they can delay a drop in their stock market price (because surely such an event would have a negative effect on their stock, both for rational reasons [such as less telemetry data] and irrational [day traders] reasons).
And yes, of course this is pure conjecture. I’m not Larry Page in disguise spilling the beans of Alphabet’s Boardroom musings.