For the most part though, it means getting fired/etc. over something that is unrelated to your work, rather than breaking a (literal or assumed) work rule.
I think it'd be more cancel culture to fire the other guy. He did something bad that isn't related to YC's rules, but maybe shows poor morals.
But even if there is a line, it’s really blurry. A lot of people said it was “cancel culture” when Blake Bailey’s publisher decided to pull his biography of Philip Roth. The sexual assault allegations are ostensibly unrelated to his contract. But they gave him that contract with the expectation that publishing him would be profitable; is it “canceling” to renege when that’s no longer the case?
I don't think we're quite there yet though. The horse guy was also widely ridiculed for calling it cancel culture. In any case, I don't think the expanded usage is what pg had in mind, and that's what's relevant here.
Kicking out paul might be too severe, but it's not "cancel culture," in the reevant sense of the term.
Typically it means those third parties (usually online activists, the ‘cancellers’) have gone out of their way to get the person fired/disinvited/whatever, with the specific motivation of diminishing their public standing. This may involve techniques such as deliberately fomenting online outrage with the aim of creating a negative PR situation for their employer that will go away when they fire the the targeted person.
(Just explaining what I think the term usually means; not saying anything about any specific claimed instances of it.)