Sexism and humor, as "sensitive" woke people understand it.. has almost nothing in common with the larger US culture. "Sensitivity" isn't fun.
But even if it did, when enjoying foreign entertainment, be it books or games.. part of the enjoyment comes from it being "different". Erasing that in a misguided zealot effort for "cultural appropriateness" isn't right. And no, we are not talking about sayings or word puns or "onii-chans" that do not work at all translated. That's very much different from editing out perceived sexism or substituting what they consider "silly" with memes.
I'd say it's a lot more...granular than that, because even within those arbitrary categories you won't always find everyone laughing at the same joke. Humor isn't that monolithic.
At this point, nobody has proven that any significant change has been made. Therefore, to scream about "censorship" seems silly. We're not talking about changing a cutscene or altering clothes. Many people haven't played the game and are simply reacting to vague, throwaway comments by the localization team. I don't think any of the actual players had noticed anything that was seriously wrong beforehand and the game has already been out for a while.
Regarding your second comment...I believe the best translations are those that convey the same underlying meaning or emotion in a manner that can reach the most people within the target audience (in other words, the most important factor is the ultimate effect, not the specific means involved). This can and does include the possibility of finding something that feels more familiar to the English reader, culturally speaking, rather than more alienating.
That's why it can be argued that Working Designs actually did a pretty good job with their localizations despite the silly introduction of, say, Bill Clinton references (ah, those were the ultimate meme of the 1990s). They still managed to convey the main emotions behind the story of Lunar, for example, even if you can find an endless number of little things they changed or rewrote in the process.
Preserving "difference" is a more abstract and intangible goal, frankly, because in reality it's essentially a matter of degrees rather than an absolute concept. I don't think that, for instance, toning down a sex joke while still replacing it with another sex joke would be going from heaven to earth in this respect. In practice, the jokes would serve the same role.