Valve's crackdown on sexual content in games on Steam has been averted, at least temporarily. In fact, it may not have been intended in the first place. The day after the surprise announcement came to light, Valve apologized for the confusion and told HunieDev and others to disregard the email about their games violating Steam's guidelines on pornographic content.
--- #WAIFUHOLOCAUST UPDATE ---I have just received word from Valve apologizing for the confusion, saying to DISREGARD their previous e-mail about the violation, that they are in the process of re-reviewing the game and will follow up soon.May 19, 2018
Mutiny!! developer LupieSoft reported the same thing.
Lupiesoft has also just received word from Valve that Mutiny!! is being re-reviewed for content, and that the 2 week deadline is off.We'll update everyone as any more information comes our way.May 19, 2018
As did Neko Works, developer of the Nekopara visual novels.
Regarding the removal of Tropical Liquor on Steam, we received word that it will be re-evaluated.😺May 20, 2018
And visual novel localization company MangaGamer.
Update: We have just received word from Valve to disregard the previous notice. According to the e-mail, Kindred Spirits will be re-reviewed and we will be provided with specific feedback if there are concerns about the game’s content.May 19, 2018
It's good news for the developers and fans of those games, although as they noted, it's not an all-clear signal: Games being "re-reviewed" could still be found to violate Steam regulations. But the promise of specific feedback in those cases should enable developers to make modifications where necessary. The Steam version of HuniePop, for example, is already censored to keep the game in compliance with regulations, but workarounds are available and it's also available for purchase uncensored on other platforms.
Interestingly, the National Center on Sexual Exploitation, formerly known as Morality in Media Inc., took credit on its website for spurring Valve to make the change. It claimed the crackdown was preceded by a two-year-long campaign, and a "heightened week-long grassroots campaign," calling on it to remove games with "sexually graphic and degrading games."
Valve hasn't commented on what role the NCSE played, if any, but the claim should probably be taken with a grain of salt: The top point on its list of "Recommended Policy and Platform Improvements" for Steam is the removal of the game House Party "due to its singularly degrading and exploitive themes," yet it remains on Steam (Update: It was briefly removed and then restored in August 2017 with a mandatory "censor bar" over the sex scenes, although much like HuniePop it can be removed with a patch)—and its most recent update equipped male NPCs with genitals, so they "can have sex with other NPCs."