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Section 1 censors "a statement that is likely to be understood by some or all of the members of the public to whom it is published as a direct or indirect encouragement or other inducement to them to the commission, preparation or instigation of acts of terrorism or Convention offences." i.e., censors inciting terrorism. This is punishable even if committed outside the UK.
Section 2 more-or-less censors the above (again) and also any information likely to be useful to terrorists.