This has everything to do with free speech. While banning a sub for harassment is perfectly fine in my point of view, there were several issues with how the admins dealt with the situation.
1) The admins did not provide an objective definition of what they termed "harassment." Is harassment doxxing? Or is it the use of ad hominem towards anonymous users?
2) The application of the ban. Given the reasons provided by the admins, the latter definition of "harassment" was adopted- /r/fatpeoplehate reposted user submitted content and attacked other users through via Reddit. There are numerous issues surrounding the application of the ban, but two stand out to me. Firstly, this sort of vitriolic behavior is commonplace on the internet and Reddit, users insult each other and humiliate each other. While this sort of 'behavior' is unpleasant it is also free speech. Secondly, SubReddits aren't insular. Certain subs like /r/subredditdrama target individual users and also borrow from others subs- it doesn't matter if that content is imager links. I imagine people who were targeted by /r/fatpeoplehate posted images of themselves. One thing you have to realize when you're posting on the internet is that you're posting into a space that anybody can access- that is why privacy settings exist.
3) The selectivity of that bans. There are plenty of other subs out there that target individuals with hate speech and repost user submitted content. There are entire subs dedicated to archiving and distributing deleted gonewild posts.
4) The admins did not consider the consequences of banning /r/fatpeoplehate. Now all of Reddit is making fun of fat people and attacking the CEO. The spillover has been high and now we have dozens of new subs dedicated to attacking fat people.
To most users this looks like the Reddit admins making examples out of certain subs that happen to infringe an extremely vague addition to the Reddit code of conduct. Despite the intention of the bans, all this amounts to is censorship. The admins banned the subs without prior warning or discussion. The best analogy I could think of is Stalin killing off members of his own government- no questions, no answers and no consequences. This is a site that relies on user submitted content and user moderation and admins went over everyones heads, only providing a short announcement before banning a group of sub Reddits.
What I find even more disgusting is how the subs that are beginning to replace fat people hate are being banned on grounds of ban evasion. It's clear at this point that the admins do not care about what the Reddit community has to say. There's a message in all this and that is that is that you can't censor the internet. If you ban a sub another one will pop up, if you ban a user they'll just create another account and if you start to actively oppress and censor communities (no matter how bigoted), they'll either find a loophole or find another forum on the internet.