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b) if content is user generated then it has to be checked against all the bad things
Google do not appear to want you to systemically police ALL user generated content. I have user generated content and must be breaking the T&C in a hundred places.
What I do is use "best endeavours" I publich my own T&C and ban/remove bad content as it is reported or found by some autoscanning code I use.
As ever I think google can tell the difference between an expected level of issues with this setup and systemic abuse.