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"
These guys fucking suck, no doubt, but I really prefer that we put the impetus on users to block communities they don't like rather than pursue total defederation
Being tolerant without limits not a good way to handle right wing trolls. Trusting right wing trolls to moderate themselves is, imo, not a route to success.