See this Snopes fact check. An Appeals Court said the PO could move forward pending a lawsuit to block it. However another judicial injunction was granted, "meaning the USPS would still need to deliver mail ballots if it does not receive an absentee voter list in the states that sued."
We do have to wonder though if the PO would ignore the injunction and remove valid ballots anyway. The current disadministration has a habit of ignoring the courts.
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