Is this the same regulation that protects SL from being responsible for, say, ripped content being sold?
Section 230 give Linden Research more flexibility to police its users. Prior to the implementation of Section 230 sites that tried to moderate content were held to be liable for all content that was published. Way back in prehistoric times Compuserve did no moderation, and it was a cesspool. Prodigy tried to keep things cleaned, but they were not able to keep all the bad things out because of the scale of their operations. When they were sued for their content, Compuserve got off free but Prodigy was held accountable because they tried and failed to police their content. One of the goals of Section 230 was to give site operators the freedom to try to police their content without being punished for trying to keep their site from turning into 4chan.
Section 230 gives Linden Research the ability to at least try to kick out the people trying to fill sims with prims and particles and generally trying to make life miserable. Without Section 230 if they tried to do this and failed then they could face legal challenges that would end up costing large sums of money even if they won.
With respect to copyright, that is a different kettle of fish. The way Linden Res. handles copyright is dictated by the DMCA. There is very little wiggle room in how they act in that regard. Nobody, even the Lindens, are all that thrilled with the hoops they have to jump through in order to properly satisfy US Copyright requirements.
One of the terrible thing about this executive order is that they will not likely go after Twitter or Google first. They have the legal muscle to rip this to shreds in short order. It is more likely that the Justice Department would go after smaller sites and try to establish legal precedents against smaller operators who are more likely to just roll over to avoid huge legal settlements. Someone like Cristiano is taking a huge risk to operate this site without Section 230 protections. It also means, that a lot of smaller operators are going to be more hesitant to say no to particular advertisers which means that dark money operations and extremist groups will be better able to strong-arm small sites saying they have to accept their advertising as long as this executive order is in place. The alternative is huge legal bills.
In short this is more than just a petty outburst, this is a big deal that has potentially big impacts to a very large number of smaller sites. (Like this one.) Many politicians from both parties have been complaining about Section 230 for a while now. Section 230 gives site owners a good deal of flexibility in deciding content and refusing to host certain content. The actions taken by the President smell like a mix of opportunism as well as pettiness.