Both sentences are completely grammatical.
The differences are in structure and clarity.
The first sentence is normal and unambiguous.
The second sentence has a small Garden Path, since
- The paper published on Monday
would normally be interpreted as a constituent, an NP modified by a relative clause reduced by Whiz-deletion from:
- The paper which was published on Monday
But then one hits the Garden Wall at what and has to backtrack and restart the parse.
What is a wh-word that functions as a marker, introducing and identifying the type of the tensed embedded question direct object complement clause (to give it its fully redundant technical name)
- what the artist called a blunt attack on people’s right to privacy.
since the details don't matter, let's just reduce this to
- what X called Y.
But now published is revealed to be a past tense verb with a direct object, and not a reduced participial, so we have to unwind the expected passive clause
- the newspaper was published on Monday
and instead read it as an active transitive clause
- on Monday the newspaper published what X called Y.
(the fact that newspaper can function grammatically as either subject
or object with publish is perhaps unfortunate for our parsing routines)
This is only a minor inconvenience, but why create any? There is no obvious reason to move on Monday from a natural unambiguous position to one where it creates a potential problem, so this appears to be a counterindicated strategy.
I.e, it's not incorrect; but it's more difficult than it needs to be.