Realistically speaking, it’s not that deliberatly malevolent.
Google doesn’t want to micromanage, they just want to control as much revenue from online ads as possible. First they did Search and had a near monopoly there, but then Microsoft starting sellings ad space in email clients, so Google started Gmail. Did they start Gmail because they really cared about hosting emails? Not particularly, they just wanted to make sure they owned the ad space that people saw when they checked their email.
Then they saw this hot new start-up YouTube, and realized the ad revenue before videos would be valuable, so they bought YouTube. Did they want to curate and be in charge of exactly what types of videos people could watch online? Fuck no, they just want the ad revenue. So they own YouTube and let people upload whatever they wanted (as long as Google got it’s cut from the ad revenue) but owning a video hosting service exposes Google to all sorts of legal nightmares. What if people upload child porn? What if they upload terrorist recruitment videos? Google doesn’t want to get involved with micromanaging all that shit, and with thousands of videos uploaded every minute its realistically too much work for them to actually directly deal with. So they just said, “Fuck it, if anyone sees something that’s illegal or whatever, click this button and the system will take down the video. It’s not our problem, and we don’t want to get involved, you can all deal with that crap yourselves“. Then, smaller companies, like the owners of Musical.ly, abuse this power whenever they can because they know Google really doesn’t give a shit about all the petty drama and will just offload all the petty modding work to third parties.
TL;DR Google isn’t malevolently crafting what sorts of videos are taken down or left up. They really want no part in the day to day curating of videos and are just here to collect the ad revenue at the end of the day. Therefore they just let pretty much any company with legal team to easily take down whatever small channel they want, because it’s infinetly easier than actually manually dealing with the tens of thousands of flagged videos each day.