The instance seems to be mostly right wing trolls. I know defederating is unpopular but I don't think much is to be lost in this case and it can save the mods some headaches.
Edit: the response on exploding-heads.com to my reporting of transphobia. Courtesy of the "second in command"
The issue is that you're no longer choosing who you interact with you're choosing who everyone interacts with. You're walking away with a table that other people are sitting at. This isn't Reddit you're not banning their subreddit, they're not deplatformed, you're just adding them to the block list of everyone on your instance.
You have no right to tell me what I can see and respond to anymore than I have a right to tell you who you can and cannot block.
That's also not what defederating is. Nobody's speech or ability to see speech is being restricted, since we are all free to set up accounts on other instances. Users are making a reasonable request to the instance owner for a normal moderation action that is in line with stated community standards and past defederation decisions (i.e., lemmygrad); the instance owner is free to honor it or not.
The basic question, which every fediverse instance has been having to deal with since inception, is how to draw the line on communities that willingly include bad actors. It has to be drawn somewhere, and where you draw it says a lot.