It's definitely happening. When Alistair's avatar disappeared I noticed immediately
- of course I have repaired that now, but one can assume the threat is not bs.
Also on the individual image pages that I have seen, the title has been changed to "it will go under...." - so either someone at Photobucket has realised that too, or it's hacked or whatever.
There are plenty of ways to host images for free, whether their reasons make sense for them or not I don't know, and I know we can't complain that something that was free for years is no longer free, but it's going to kill them off rather fast I'd say... what else would you use Photobucket for?