I do not understand your confusion since those questions are clearly answered in the article.
- Chinese language searches on Baidu made from within the US are censored
- This is an infringement of the civil rights of the [edit: US-based] Chinese writers whose works are being sought out by US-based readers of Chinese
- Title VII forbids such abridgments of a person's civil rights
The bottom line is not that Baidu can't censor its results in accordance with the policies of the Chinese government, but that it can not conduct business within the US at the same time.
I'm not sure that the plaintiffs can win their case, but that's not really the point - even if they lose, it still shines a bright light on Baidu's censorious practices.
- Chinese language searches on Baidu made from within the US are censored
- This is an infringement of the civil rights of the [edit: US-based] Chinese writers whose works are being sought out by US-based readers of Chinese
- Title VII forbids such abridgments of a person's civil rights
The bottom line is not that Baidu can't censor its results in accordance with the policies of the Chinese government, but that it can not conduct business within the US at the same time.
I'm not sure that the plaintiffs can win their case, but that's not really the point - even if they lose, it still shines a bright light on Baidu's censorious practices.