I mean it makes sense when you think about it. The federation isn’t exactly going to go around advertising that they have the best f*** simulators on their flagship. Whereas Quarks is a literal Space Casino. Just because your company doesn’t block porn, doesn’t mean you should watch it on your work laptop, at least while you’re on duty.
Lower Decks is very clear about the wide range of uses of the holodeck, and their definition of Safe for Work has certainly progressed from 21st century standards.
If you combine the idea of the holodeck with the logic of the purge from The Purge films, you could frame the holodeck as a way for people to express their darkest desires privately. Outside the holodeck, utopia exists.