If this is such a problem, then clearly there is a demand for it. Perhaps create a channel just for sexual streaming. The only question is, what to call it?
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Well, they can't do that, because it would give the impression that they're tolerating it. Which they are, but they can't leave that impression.
Assuming the streamer proves they are at or above the legal age of consent for their location, why could this not be tolerated?
I'm not saying that it shouldn't be tolerated. But other people don't want it to be tolerated, usually hardcore religious people.
With Twitch officially prohibiting it and streamers doing it anyways, those people will be angry at the streamers, not so much at Twitch.