There's nothing in the treaty that prevents Turkey from doing what it's doing. First and foremost, NATO is a defense alliance that's aimed at attacks against its member states.
While the Kurds in Syria are an ad-hoc ally of some NATO members, Turkey views them as enemies. Allies of NATO members are not protected by NATO, so there is no article 5 obligation for NATO members to step in.
Aside from that, NATO members are regular countries which use diplomatic tools to pursue their interests. Aside from Turkey, I don't think other NATO members approve of the fight against the Kurds, but doing more than just speaking out has consequences.
First of all, Turkey is a NATO member and as such it is an ally of other NATO members. Doing more than speaking out hurts that relationship. As such, any response beyond speaking out has to weighed: the benefit of taking action to prevent conflicts that you don't approve of (view as unnecessary / harmful) against the downside of pushing an ally away.
The apt schoolyard proverb would state that it may be better overall to have someone inside the tent pissing out than to have them outside the tent pissing in.
Specifically with Turkey, NATO allies will be wary of Turkey entering Russia's sphere of influence over their own. An example of such tensions is the purchase of Russian S-400 air defense systems.
Turkey is also NATO's way into the Middle East. In turn, the Middle East is an important logistical artery for ships travelling between Asia and Europe. To maintain geopolitical stability in the face of Saudi-Iranian tensions, Turkey is strategically located if the conflict escalates.
Punishing Turkey too hard may cause it to enter (even further) into Russia's sphere of influence and that may be seen as a greater downside than some proxy wars in Syria where NATO allies have little if any interests other than humanitarian concerns.