Yep, I remember that. Interestingly, we also have a thread going on the NFL banning, and the Ravens firing, Ray Rice for his domestic violence.
Basic question: Does a university or employer have the right to limit or punish student or employee conduct off the job?
My answer would be "Yes, but it has to show a reasonable connexion between the conduct and the job/student status."
In this case, if I was arguing for the uni, I would say that these kids had committed two acts deserving discipline: they violated the school's no-cussing-for-a-week policy, and they gave evidence of their contempt for the "Safe Space" policy, which borders on harassment in and of itself.
If I was arguing for the kids, I'd go with free speech, expression of opinion about a uni policy, and no significant connection to their student status or on-campus environment.
I think the uni is going too far, they would have been better off to ignore this one. But its position is not without merit.