Marky is right. Anyone can do whatever they want with their stake on Steemit.
Using that Stake to support Steemit.inc shills is another thing (you know the story of Steemit - Hive clash). His votes on these accounts are conscious.

He knows that these users/accounts are considered persona non grata on Hive by pretty much every single top 20 witness and/or legitimate whale investor on Hive. By curating these users he is showing his support for them and disrespect for Hive.

The so called "I'm still voting on Steem for financial reason, earnings converting to HIVE but this dickhead is to stupid to see it" is a bullshit excuse.

Obviously he is converting it to Hive just as many do, including these non grata users.
These user have also converted some Steem to Hive so they can start the exploitation here (I am not saying that this is the reason why mmmkkk is converting to Hive).

He can choose to curate anyone else on Steemit who is not related to these non grata accounts. He doesn't care obviously as it seems that he only thinks about financial gain.

"Every time I've spoken to marky and the funkybunch, they always say "there are no rules" people can flag (downvote) for "any reason" (even if it seems "unfair" to you personally)."

I have never said that there are rules for downvoting. You have brought it up out of the blue.

If there are rules or not, it has nothing to do with abhorrent behaviour/actions such as blackmail/bullying.

1. He reported some user.
2. Noticed that the report was not processed within few days.
3. Posted the above post and started downvoting Hivewatchers removing the earnings because they didn't do what he wanted.
4. He demands Hivewatchers to accept his report, otherwise he will continue removing reward support that the project receives (continue blackmail/bullying).

If you were Hivewatchers, would you bend to such blackmail/bullying?
I am sure that you would not.

Hivewatchers will not accept bullying/blackmail.