"Is it going to chase away some old customers - maybe, but no"
I have seen quite a chilling effect on many that I follow. A few of which have been "chased" off and no longer post and have powered down. But your other 2 points I 100% agree. Before they went dark they posted several instances where simple malice were the reason for their flags. Initial content was flagged, they (content creator's) objected, waves of more flags ensued. It had nothing to do w/bad content after the initial flag, which is obviously subjective to begin with...