To use a trolley problem metaphor, what they are saying is not pulling the lever is the same as allowing five people to die. If fascism is progressing and you do not stop it, you are allowing it to progress. Whether you consider that propagation comes down to your ethical framework, but from a consequentialist view it is accurate

The strongest argument I can come up with for why this should go is that it violates Spotify’s explicit policy on hate speech, inciting hatred against trans people. They remove other stuff that violates, and they were aware this did, as they removed them album artwork, so them deliberately not removing the song isn’t a lack of action, but an action of discrimination in and of itself

If others want to argue that shouldn’t be Spotify’s policy, we can have that discussion, but if we only have that discussion when trans people are brought up then the discussion was never about free speech and thus arguing platforms, censorship, and tolerance paradoxes is moot. It’s just tone policing