Not really all I’ve read about transactions being censored on chain at worst just delays the transaction and increases the fee, tx still included in blocks. So how does this affect the security of the network?

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Transaction fees are the only thing that pays for censorship resistance.

Because the censor doesnt earn the fee of that transaction, but his competition does.

Ok so in theory as block subsidy goes down and miners rely more on fees then security should increase over time?

Correct, the subsidy is irrelevant for security budget.