When you ride the cloud/ai hype wave you end up with making fast and not very healthy decisions. Same things happen with other providers so whatever is your choice you must have disaster recovery and replication in place. If you wanna go cheap just make some s3 backups on R2, BackBlaze, Wasabi.
Or Hetzner Object Storage! Was released last week and, as you'd expect, cheaper than all of the above (though r2 would be cheapest if you need a lot of bandwidth, since it's free with them)
Hetzner was always like that, even before the AI wave. They lowball people with cheap pricing and arguably this attracts a lot of "unwanted" people, so Hetzner always acted strict on such issues.
Last time I used them (pre-2020) they were going as far as requesting customer's ID and rejecting them on the basis of country of origin, and I assume this also includes facial features that may resemble "an average scammer". Obviously this did not happen to European/American IPs so they never faced such issues, and as such this practice was invisible to the world.
I can say for sure OVH and Scaleway would try to negotiate with you before erasing your data - this may have changed over the years.