Very good question! Yes, Japanese censorship on pornography is ridiculously ambiguous. It is awfully embarrassing not because of the censorship but its ambiguity. Strictly speaking according to the law, even pubic hair must not be seen. The reality for the past at least 5 years, however, is that showing pubic hair is “virtually” permitted as long as genital organs are not revealed. The rest is totally depending on the “discretion” of the publishers and the web-site owners. I can fully understand your question (and your anger) as to this “ambiguous discretion,” which is really embarrassing even to the Japanese.
Recently, the Japanese public opinion about sex seems to be changing. However, there still is a strong resistance to any kind of abolishment of the obscenity law. There have been many famous court cases on the infringement of this law that have involved movie makers and artists. One recent example is Megumi Igarashi.
Other premium sites that offer access to uncensored Japanese porn (some exclusively in HD and with English) include:
After the case, most manga bookstores removed all materials produced by Suwa with some even closing their ‘Adults Only’ section entirely.
Porn producers have been particularly inventive when it comes to getting around the Criminal Code and, to some degree, has been a driving factor around some of the country’s ‘weirdest’ trends in porn.
In recent years, the digital mosaic used by NEVA has become more transparent and no longer completely obscures the action.
In 2004, a major obscenity trial was held in Tokyo which found hentai manga artist Yuuji Suwa guilty of distributing indecent images. The publisher, Monotori Kishi, was also convicted of the same offence.
It is believed by some that, in an attempt to bypass the laws on porn censorship in Japan, producers turned to tentacle porn.
She and her supporters claim that the vulva is a natural part of the female body and should not be considered as something ‘obscene’. However, the authorities didn’t listen to a word of it.
The All Japanese Pass network also offers a huge range of sites dedicated to different niches in Japanese porn and includes access to over 22 premium porn sites, including:
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We do have censor for violence. Like Takeshi Kitano's movies some movies are censored for violence in Japan.
The pornographers do their own self-censorship as a condition of their membership in industry groups. Prosecutors use genitals as a rule of thumb as to what constitutes "indecent" as per the law, hence the mosaic bit keeps things "legal" in terms of not getting prosecuted. Pornographers are mostly interested in money-not the principle of freedom of expression, so they don't "push" the law. Presumably, if there were people out there mounting a constitutional challenge as per Article 21 things might change.