A comment reminded me of this article, and I re-read it after 10+ years. It contains some interesting tidbits which I forgot about:

All the while, Violentacrez's critics cried out the same refrain: "How does he get away with this?" One reason Violentacrez continued to occupy such a high-profile position on Reddit was of course his free speech rhetoric. But Violentacrez has historically had a close relationship with Reddit's staff, a fact far less well-known than his controversial behavior. Violentacrez was a troll, but he was a well-connected troll. He told me he was close with a number of early Reddit employees—many of whom have now moved on—chatting with them on IRC or sometimes even on the phone. A few years ago, while Jailbait was still going strong, Reddit's administrators gave him a special one-of-a-kind "pimp hat" badge to honor his contributions to the site, which he proudly displayed on his profile. Brutsch said he was even in the final running for a job as a customer support representative at Reddit last year.

During the Jailbait controversy, Erik Martin, the site's General Manager, reached out to Violentacrez beforehand to warn him that they were going to have to shut down his prized possession, according to a chat conversation Violentacrez leaked at the time.

"Want to give you a heads up," Martin wrote. "We're making a policy change regarding jailbait type content. Don't really have a choice."

(Martin did not respond to requests for comment.)

Violentacrez's privileged position came from the fact that for years he had helped administrators deal with the massive seedy side of Reddit, acting almost as an unpaid staff member. Reddit administrators essentially handed off the oversight of the site's NSFW side to Violentacrez, according to former Reddit lead programer Chris Slowe (a.k.a. Keysersosa), who worked at Reddit from 2005 to the end of 2010. When Violentacrez first joined the site and started filling it with filth, administrators were wary and they often clashed. But eventually administrators and Violentacrez came to an uneasy truce, according to Slowe. For all his unpleasantness, they realized that Violentacrez was an excellent community moderator and could be counted on to keep the administrators abreast of any illegal content he came across.

"Once we came to terms he was actually pretty helpful. He would come to us with things that we hadn't noticed," said Slowe. "At the time there was only four of us working so that was a great resource for us to have."

Administrators realized it was easier to outsource the policing of questionable content to Violentacrez than to dirty their hands themselves, or ostracize him and risk even worse things happening without their knowledge. The devil you know. So even as Jailbait flourished and became an ever-more-integral part of Reddit's traffic and culture—in 2008 it won the most votes in a "subreddit of the year" poll—administrators looked the other way. "We just stayed out of there and let him do his thing and we knew at least he was getting rid of a lot of stuff that wasn't particularly legal," Slowe said. "I know I didn't want it to be my job."