this post was submitted on 15 Aug 2023
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This isn't true, I think. You can have an instance that federates with nearly everyone but which still has a higher standard for behavior for its own users. This way, users on such an instance can see all the problematic instances but are not permitted to be problematic themselves. It's an option.
(Even still, I think you'd find yourself de-federating from someone eventually for spam or other technical reasons if not due to objections over content.)
It's a problem of scale. If you don't defederate from a racist-focused instance (for example; hypothetically speaking), then you need to devote resources to moderating those users who make racist comments, as allowed by their instance, but directed at your users. Sure, you could do this, but it's probably smarter to just defederate and save the resources for other uses. And no moderation team is going to be flawless, so racism will still creep in and be missed by the mod team.
It might be a different story if users are given the tools to block entire instances (like kbin has) but even then I think the ROI would be low.