Because of a comedic video in which a couple attempts to break the Guinness Book of Records for longest sexual intercourse. Having watched the video, for... research, I can say that Google was just looking for any reason it could for banning LBRY.
LBRY pays its users cryptocurrency specifically for using the app, which has a desktop and mobile versions. You could also sync your youtube channel so you don't have to re-upload every video to LBRY. I've been using it for years, I trade LBRY on exchanges, and I use the LBRY app on mobile about as much as I do on youtube since most of the people I watch have youtube channels, but it's nice to have perks for watching the same videos that youtube wouldn't give me anything for.
LBRY has responded on twitter, making mention of Netflix's video which I will not name here, is still up, and it was never banned. Despite the censorship-resistant nature of LBRY, it does of course have a rule system in place for illegal content. It's content sharing on the blockchain, and it has no doubt been on Google's crosshairs for a while.
God of War has had more offending nudity, and Twitch isn't banned either.