Of course Elon Musk can decide how to run his site according to whichever ToS he wants. He won't do it according to The First Amendment despite claims by him and his backers. It always makes sense to have some terms of service in order to avoid the place turning into 4Chan or Gab. And of course, advertisers are going to be wary who they put their names next to - just look at adidas and Kanye, etc...
In fact, Jordan Peterson himself believes that Twitter should be regulated more. He thinks people should not be able to insult him, for example, if they have an anonymous handle. He seems irritated at the idea that whereas he put in the work to build up a name for himself, anonymous people can get a free ride of his publicity and mock him as though they were his equal.