An astute reader emailed me with his analysis of the Google Page Creator Terms of Use, which do not seem to prohibit posting adult content as long as it is legal (which, I presume, means complying with U.S.C. section 2257, just like everyone else).
From the TOU:
I don't expect a bunch of people will snap up these URLs and create nudie sites. Only that unlike what I remember from past free "build your own site" services, Google doesn't seem to be smacking down adult content before it has a chance to get started.