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for this point specifically, i believe the rule only applies to the domain owner, not any subdomain’s. owning a .ga domain with similar rule, i understands this is a damocles sword over my head, that’s why i have a “backup” .fr domain where i slowly migrate everything…

(+2)

Third level domains specifically means three-part domains (x.y.io) - in other words, subdomains. Although from context, it seems they may be talking about resold third level domains (e.g. itch.com.io) and not third level domains managed by the second level domain owner (e.g. falsfiction.itch.io).