I could be wrong but it always (in my recollection, so only going back a few years) excluded nsfw? When I last visited even going to a fully nsfw subreddit all the media was blurred out, so you might have NSFL titles .. but if you're that timid then probably any site with UGC is going to be a struggle.
The binary SFW/NSFW designation is also a problem. First there is the difference between NSFW text and NSFW visuals. You will see plenty of text posts on Reddit labeled as NSFW because they include a dirty joke, talk about sex, or includes something incredibly un-PC.
When it comes to visuals, there is a big difference with how comfortable people are with sex vs violence (NSFW/NSFL). Some people would be happy to see one but want to stay away from the other. Then you have the difference within those categories. A picture of a person in skimpy underwear is not the same thing as hardcore porn. Similarly a video of an athlete hyperextending their knee on a sports subreddit is different than the type of gore that you might see on the watchpeopledie subreddit mentioned above.
Maybe you should be able to indicate the severity and category of the NSFW-ness. Potentially something similar to MPAA ratings were you can have PG-13, R, X with an indication if it is for sex, violence, or something else. However that puts even more work on the users/moderators which is probably why Reddit would never implement it.
I don't know how reddit even operates while having subreddits dedicated to hardcore pornography and extreme gore and violence on the same domain as sfw subreddits. Youtube, Facebook, Instagram, Twitter, do not allow those type of things for a reason, because once young children start using the site and the parents/ media find out what their kids could be looking at, their is a large amount of outrage. Reddit seems to have not had that problem, because it is not as popular and harder to use for < 13 year old demographics, but if reddit keeps pushing an easier to use layout and keeps expanding, then they are gonna run into this problem at some point.
Reddit definitely had that problem in the past. As an example they had a “jailbait” forum which they only took down when CNN ran a long story about it at primetime.
Heh, recently 4chan moved their SFW boards to a different domain. I imagine it was so they could have advertisers happy in there while keeping the other one intact.