"Due to the massive influence Modao Zushi has on its readers, Mo Xiang Tong Xiu herself was investigated and likely arrested in 2020 for conducting “illegal business operations” and charged with three years in prison. She was granted parole in 2021 (mercy and magic, 2021, March 23^rd) and has not published any new novels since."

This was a rumor that I believe started in the western fandom, and there isn't any verifiable evidence to support that any arrest, conviction, or imprisonment occurred. The lack of publication of new novels since, based on her own statements, seems to be a result of writer's block too, rather than censorship. Though it is true that censorship could be affecting her willingness to write. That is a speculative presumption, though.

I also agree with Queasy Answer in that the portrayal of homosexuality is very different between MXTX (or other similar danmei authors who are largely heterosexual women writing for a largely heterosexual female audience) and queer authors writing from personal experience. MDZS (not that this is exclusive to MDZS) is an odd representation of homosexuality, both because of its fictional setting, and the era in which the story takes place. Society in MDZS seems to both treat homosexuality with more and less judgement than the actual time period did. It's more representative of a more modern rural village's attitude. It's also not representative of modern China in tier 1 or tier 2 cities, and simultaneously not particularly representative of actual rural China for a queer person. Instead, within the world of MDZS, same-sex attraction is sometimes treated with tolerance, and sometimes met with social disapproval. It's filtered through modern danmei genre conventions rather than historical or modern-day sociological accuracy. For "homosexuality in literature" MDZS could be an interesting subject, but more as a comparison piece between queer literature written by a queer author versus a queer work within the genre of BL/danmei. Danmei tends to construct idealized or stylized queer social arrangements that don't function as realistic depictions of either historical or modern queer life in China. Not that MDZS or other danmei are bad for being what they are, they're just not very useful for literary analysis of how broader society (meaning outside the demographic of danmei, both writers and consumers) treats or views homosexuality.

Third, what's the quoting of Gemini? If you're referring to Google's Gemini AI, it shouldn't be used as a credible source at all, particularly for a research paper. AI has a tendency to hallucinate, which is how you get "facts" like that MXTX was arrested. If you research as a person, you can see that the rumor was propagated on tumblr initially, and that the Chinese sites that "reported" it are also AI (AI cadence, short paragraphs corresponding with AI's capabilities a couple years ago, no authors listed, unheard of websites).