Instances are not shadow banning, they all listed in instance list page.
I didn’t get the mod drama thing. I guess this guy mixing instance admins with community mods.
Also, I don’t think there is that much blocking between instances except Beehaw, since they want to create a refined user base.
Edit: what I was telling here is only applies to Lemmy. Looks like things are different for Mastodon side. So this comment may have a realistic view. I just don’t have enough experience on there.