EatALime

Beehaw markets themselves as a heavily moderated space and they caught a lot of flack for defederating from Lemmy.world and sh.itjust.works, but even they are still federated with a bunch of different instances. There will probably be a pool of instances that share a fairly hands-off approach and remain connected to all the other instances that have a “we’ll federate with anyone” policy. There will likely be a collection of middle-ground instances who defederate with instances that are the source a lot of harassment or certain NSFW material but otherwise don’t restrict much and still federate with instances that maintain similar moderation styles. At the far end you end up with places like Gab and Truth Social which are both Mastodon instances that aren’t federated at all and are completely closed communities because they only ever wanted to be an echo chamber. The rest of the fediverse or even just Mastodon didn’t cease to exist when Truth Social started up its own walled off instance.

People can self select into the kinds of communities they like. The unrestricted ones will only fail if the lack of moderation is such a problem that nobody signs up to any of them.