I think Hetzner wants you to tell them you’ve removed it. They did as requested and took down the VPS and disabled it. It’s now in your hands.
I myself wouldn’t ignore such a letter. It’s now just asking you politely. If you continue they need to make the choice if it’s worth pursuing you. I don’t have any good insight if and under what circumstances they do. I would comply, remove said content and probably not reply to them. It’s unlikely to make it better for you if you talk to people targeting you. And I wouldn’t keep the logs around as they requested. Accidents happen, files get deleted, nobody is perfect.