Meta is already a target for regulators - they are going to have to be very careful around this. I think this is why the "metaverse" is still more likely to be decentralized than created by a tech giant. Even if Meta wanted to take a libertarian, "dream whatever you want", stance or even a "dream whatever you want so long as it is more or less legal" stance, they would see a regulatory deluge come pouring down on them. There is no way VR will be able to go mainstream without a drawn out fight over content prohibitions. I think the early internet was a bit of a historical outlier in this sense, where it happened to come about when a relatively laissez-faire attitude towards censorship was prevailing and people did not realize the full impact it would have. That is not the case now. People understand on all sides that this technology has the potential to revolutionize our systems of social relations once again, and I suspect that they will be fighting tooth and nail to shape that outcome as they most desire.
> There is no way VR will be able to go mainstream without a drawn out fight over content prohibitions
Could be, but it's a bit dystopian to imagine that the government would have a say on the images you can generate- locally and in realtime- and send straight to your own eyes, don't you think? Dystopian and very difficult to enforce, too.