I don't want to get into a whole thing here but assuming you are in the United States, the 1st Amendment's guarantee of "freedom of speech" is generally only applied to government entities. Companies have a lot of latitude under the law when it comes to censorship.It's still freedom of speech and freedom of expression:
"Freedom of speech is the political right to communicate one's opinions and ideas using one's body and property to anyone who is willing to receive them."
Microsoft is literally spitting in the face of that by banning the naked people as well. There's nudity in M-rated games as well.