> my understanding is that Visa/Mastercard police their perceived brand risk primarily through broad statements that are then interpreted by payment processors in detail. Visa aren't the ones saying "Women having sex on their period is an extreme sexual activity", they're just saying "no extreme sexual activity" and the payment processor has to figure out what that means leading to the former claim.
You're not wrong but that's only part of the story. What you're describing happens, which leads to overly-conservative interpretations of the unwritten policies. But the card brands do also have explicit rules that they expect downstream players to adhere to.
Confusingly - and this is where your impression (which is common) likely comes from - the card brands themselves provide different rules to different downstream providers, so it's not like there's one single, consistent list of rules for Visa globally (for example). It's not law and they are not bound by precedent or even an expectation of consistency.
