As far as I understand it, content posted to one server gets stored on every federated server for the other server’s users to see.
This is wrong, else every self hosted instance would’ve been a storage nightmare.
There have been instances that were defederated for posting nazi / racist content, and CSAM
I assume the later is something CP? Yes, those are legimite cases, just like spam/DdoS, but even then in every case i’ve seen yet, a Limit would’ve been enough. A pretty good example seems to be qoto.