I was told by an Amethyst user yesterday that my posts are hidden by default and marked as “inappropriate content”. Is that not correct?

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It's probably correct. They are following somebody that marked you as spam. If they don't agree, they can stop following that person to see your content. Up to them.

So let’s say I’m critical of a huge account with many followers and they falsely report me as spam, making my posts hidden to a huge group of ppl and effectively censoring me. That seems like a sane and reasonable system to you?

In that case, people either agree with the account and you should be hidden or they don't agree with the account and can blast on the account to change it. Either way, like a free market, people will sort itself out.