You can have moderated communities without every community having to cater every user. Personally, I think that’s part of the beauty of federation. Some comms & instances can be locked down and heavily moderated to create “safe spaces”, others can encourage open discussion with minimal moderation.
When power and tools are given to a central authority to dictate what communication, expression and thought is “prohibited”, for essentially any reason, it is only a matter of time before that is abused.