This means, for example, that the top bitcoin mining pools could likely freeze an account’s funds for a very long time assuming they decided it made sense. But generally it’s assumed this won’t happen, because they are paid in Bitcoin and arbitrarily freezing someone’s funds is generally not going to be viewed favorably by the people that support the value of Bitcoin.

No, it is not that. Right now, if all the major pools censor your transaction, you can simply go to Nicehash and buy enough hash for producing a block, which will include your transaction. That will have a cost that is slightly above 12.5btc, but you get 12.5btc back, and you will get exposed to some variance risk. However, this means that, essentially, any significant enough amount of funds cannot be freezed. At least, not just by policy.

Now, the only option to effectively freeze the funds in pow chain would be to explicitly fork them out, to make a soft fork that explicitly considers your transaction invalid. However, that protocol change needs to get adopted by everyone, not just by the major pools, because otherwise, with any miner-only enforced softfork, it pays off to drop it and trick competing miners to get stuck in a shorter subchain.

This, the fact that miners are competing with each other, is the thing that protects against censorship in pow chains, and not any economic based common goods consideration.