Steam didn't remove the games due to Australian law lol. Where did you get this idea?
Steam games' availability is per-country. They could've removed games for Australian users only. NSFW games are not shown to Chinese and German players on Steam since forever.
"lol"
This whole thing came about because of the Australian campaign to remove rape games consistent with law. Payment processors could be found liable for processing payments related to illegal activities. Steam anad the payment processors could have made it region specific, but didn't, probably for PR reasons.
https://en.m.wikipedia.org/wiki/List_of_banned_video_games_i...
Also, Steam Direct didn't update their policy on game content from what I see. Doesn't look like Steam fought back. Seems as though Steam has never supported games with rape, incest, child exploitation, etc.