Tumblr did a terrible job communicating the change to their platform -- like most of their communications. Currently, and by that I mean minutes ago, anything their algorithms or bots or real people deemed "adult" or "sexually explicit" or "genitalia" or "female-presenting breasts" (their terrible term) has now been "hidden from public view" and is only visible to the blog owner. At first, they said they would delete the offensive blog. This has the same effect.
The real reason -- which Tumblr, and likely more sites will soon face/implement -- took some fortuitous stumbling and thesis-level searching to discern is: The US Congress. On August 1, 2017, Rob Portman (R-OH), introduced Senate Bill 1693. It passed in the House on February 27, 2018, and the Senate on March 21, 2018. It was signed by Trump on April 11, 2018. The combined laws are Stop Enabling Sex Traffickers Act (SESTA) and Allow States and Victims to Fight Online Sex Trafficking Act (FOSTA). They make it illegal to knowingly assist, facilitate, or support sex trafficking, and amend the Section 230 safe harbors of the Communications Decency Act (which make online services immune from civil liability for the actions of their users) to exclude enforcement of federal or state sex trafficking laws from its immunity.
As a result, websites and ISPs can now be held liable for the actions of their users. Many, like the personals section of Craigslist, either ceased or have taken actions similar to Tumblr. Furry personals website Pounced voluntarily shut down, citing increased liability under the bill, and the difficulty of monitoring all the listings on the site for a small organization. (Full disclosure: I'm not a furry, just citing example from a well known wiki source.) None, as far as I know, have given the real reason as stated above.
Cue the unintended consequences. These laws will actually make prosecution of actual human traffickers less possible, because it now goes back underground. Sex workers now have to move either partially into or fully into shadow, again, making them more susceptible to pimps and criminal organizations, or onto streets where they are susceptible to crime or violence by johns. Artists and authors who make erotic works have fewer outlets or places to promote/display their endeavors. LGBTQ folks have less places online to connect, meaning fewer safe places to congregate, discuss, or network.
Places like Tumblr were -- I'm using the past tense, sense it seems unlikely to be reversed in the near-term -- a safe place for many LGBTQ, especially youth or those in rural areas or differently-abled, to meet and to explore their sexuality/gender. In recent years, there has been a marked increase in targeted censorship of LGBTQ communities online, including Facebook.
The US Department of Justice expressed concerns about the bills/laws which would make prosecution more difficult and that it was possibly unconstitutional under the Ex Post Facto Clause. Senators Ron Wyden and Rand Paul opposed it under similar terms. SESTA has been criticized by pro-free speech and pro-Internet groups including the Center for Democracy and Technology, Electronic Frontier Foundation, the ACLU, Engine Advocacy, the Sex Workers Outreach Project (which described SESTA as a "disguised internet censorship bill"), and the Wikimedia Foundation, who argue that the bill weakens the section 230 safe harbors, and places an unnecessary burden on internet companies and intermediaries that handle user-generated content or communications.
The laws tend to favor big-tech and trial lawyers, since it would require teams of lawyers to consider all possible scenarios when any online service could theoretically be used to "facilitate" sex trafficking. The Senate voted down a proposed amendment by Ron Wyden that stipulated website moderation is not the same as nor contributes to liability.
There you have it folks -- Welcome to the United States of America, please turn your calendars back 60 years. The time is now 1952.