This is just a blantant lie.
You can find many works tagged and explicitly mentioned Palestine and their content policy explicitly doesn't allow depictions of real children.
Quote
yuki
@ruicharadrius
okay. so apparently ao3 is complicit in censoring every work relating to Palestine. People have identified the owner as a Zionist. They also allow nsfw works of REAL children on their site. They allow csem of real kids but censor the voices of Palestinians. x.com/ruicharadrius/…
Readers added context
This is blantantly untrue. If you search for "Palestine" on Ao3, there are an abundance of works which explicitly mention Palestine. Additionally, Ao3 explicitly does not allow works depicting real life children as according to their Content Policy.
archiveofourown.org/works/58278472…
x.com/Keniisu/status…