I think this is a really good point. It’s a shame that they don’t want to Federate with some of the larger instances, but that’s the whole point of the fediverse. If you Federate with who you want to Federate with, and you have control over your own moderation and red lines. It’s virtually impossible to have meaningful conversation among a broad group without someone getting offended. So you might choose to let people occasionally be offended, or you might choose to create a safe space for a limited group.
It’s a philosophical question with no single right answer. The fediverse doesn’t have to be all things to all people, which is exactly why it can be all things to all people. Corporate social media has to have one set of rules for everyone, and the system for deciding and enforcing the rules is generally just about money