You’re misinterpreting the ruling. The ruling was that the states that brought the case (Missouri and Louisiana) didn’t have standing to bring the case forward,

You’re misinterpreting the ruling. The ruling was that the states that brought the case (Missouri and Louisiana) didn’t have standing to bring the case forward, not that the Biden administration acted legally. The majority in the court said a plaintiff who was directly a victim of the censorship would have to bring the case, rather than states on behalf of unspecified citizens. In other words, the case was dismissed on a technicality without ruling on the merits of government censorship that is done via a private third party.