Moderation in the fediverse (inc. Mastodon & Lemmy) means defederating from "problematic" instances, where problematic is defined in the rules of the server doing the federating server (which appears to be documented at https://beehaw.org/instances)
This means moderation happens at a community & instance level rather than global moderation.
Please correct me if I'm missing something - I'm quite new to Mastodon & the fediverse like I'm sure many are!
It's actually problematic when instances get too large to fail (like the two biggest mastodon ones), because when their mods cannot cope anymore, you can't realistically ban the whole insurance - too many users would be affected.
But that's still better than a single global namespace where you have to deal with single accounts every time.
Or like Twitter, and every other large social media network. So much straight up criminal stuff flies under the radar simply because it's impossible for a handful of people to police that many people.
Well, they can have their server to themselves, I'm not going to subscribe to another server only to see it also blocked. They have proven to be the unreliable ones.
I hope the rest of the network retaliates and defederate beehaw. That's the right thing to do. If they want to be alone, grant their wishes and make them alone.