You keep saying they are enforcing 'the law,' when in fact they are just enforcing their own TOS, which is perfectly within their rights.
> the fact is he paid for a service which the provider terminated
This makes it sound like they just shut down his account, when in fact they communicated with him, telling him exactly what he would need to do to bring his content into compliance with their TOS, at which point he would presumably have continued access to his account. At this point, it would be his choice about whether to continue his relationship with DO, or to move to another provider.
There are laws regarding defamation, I don't think DO can just opt in to enforce them. They can write anything in their TOS, wether or not it's legally enforceable is another question.
> the fact is he paid for a service which the provider terminated
This makes it sound like they just shut down his account, when in fact they communicated with him, telling him exactly what he would need to do to bring his content into compliance with their TOS, at which point he would presumably have continued access to his account. At this point, it would be his choice about whether to continue his relationship with DO, or to move to another provider.