Been a Hetzner customer for years and have considered using them for a new business project of mine. Will reconsider it partly after reading this. At least use a separate provider for backups so I can quickly recover, just in case.
Seeing it happen to a reputable project such as Kiwix [0] definitely damages my perception of Hetzner. I've read numerous complains on Reddit a few months ago but they mostly boiled down to breaching the ToS in obvious ways. Still, not giving a heads up before cancelling a service and no option to recover data is just bad business practice.
[0] (I've deployed Pi's with Kiwix in remote areas in Africa, it's an amazing project)
Having a single backup with the same provider as your compute is a bad idea, no matter the provider.
Same goes for having your domain with the compute provider.