Except that Ao3 absolutely cannot choose to say the content it hosts must be made by humans without opening the door to the very censorship it was created to avoid.
Because there is no way to tell with 100% accuracy that a piece of writing was created by or with the aid of generative AI, and anything less than 100% accuracy is completely unacceptable, no nuance, no exceptions. You can tell with 100% accuracy if something is not a fanwork--like an ISO or placeholder post that does not contain a fanwork--and you can tell with 100% accuracy if a fanwork contains a link to a payment apparatus or is otherwise soliciting payment for fic in violation of the TOS, so these things can be disallowed and, when discovered and reported as violations, dealt with by PAC. And you can tell with 100% accuracy that a fic has been plagiarized, meaning that it has pulled entire passages word for word from another fic and this can therefore be detailed in a report in order for PAC to take action. (This is important to note because while generative AI is in fact The Plagiarism Machine, that can only be proven on the back end via the datasets used to train it. You can't actually look at generative output and tell which place the words were ripped from, because LLMs operate on statistical probabilities of word order, not actually pulling phrases wholesale from a specific work.)
But you cannot tell with 100% accuracy that a particular passage has been generated with AI.
And we are already seeing the problem with spurious AI accusations! People are claiming that 'excessive use of em-dashes' is a 'tell' for AI, when the only reason em-dashes exist in AI-generated output is because the machines were trained on human-generated writing that used them! (And as a writer who frequently ODs on em-dashes and italics, I find that particular 'tell' especially insulting. My overuse of em-dashes comes from my own brain, thank you very much.) So the only way to actually tell that someone on Ao3 is using AI to write their fic is if the admit as much up-front.
Guess what would happen if Ao3 decided to ban AI fics from the platform? Those fics would stop being tagged, and then we'd run into the exact same problems we had on FFN with fics being grudge-reported by bad faith actors, which was one of many reasons Ao3 was created in the first place--so that people couldn't do that.
Generative AI sucks and I think everyone who uses it to create fics is a loser, but I'd much rather be able to avoid them by excluding a tag or muting an author than have to worry about some asshole who hates me trying to get my fics deleted by reporting me to PAC for suspected AI use.