I am looking at screenshots on your game's itch.io-page and my best guess is that somebody _knowingly_ _falsely_ reported your game because they did not like that a woman wearing a cross enjoyed sex. And Steam did not double-check the claim.
I have not fact-checked my bold claim, though. (Same as Steam. ;p )
CrimsonKero
I know here on Newgrounds, you're definitely not allowed to have minors in sexually suggestive situations (based purely on appearance), and it's best to assume Valve has similar rules on their platform.
In this case however, the demo is still up on NG, none of the characters seem to be underage.
I can only make two assumptions: either it's a false-positive made in error (which you believe it to be), or the full game MAY contain a "younger-looking character" that isn't in the demo.
Sei-ren
We are trying to dispute this and are looking for other release options :*(