Why would they face any legal consequences any more than any other social media?
Instance location. Content comes at you from all over the Fediverse but once its in your instance it’s actually located on your server. It’s obvious how even regular NSFW stuff can be a problem if your instance is sitting in a ME country but perhaps less obvious (and more troublesome) is text based content.
For instance if a user is enrolled on an instance located in Germany and then subscribes to Neo-Nazi content from an instance located in the United States. That NN material is now on your instance but much of it is probably illegal in Germany. What happens when the German Authorities find out and come knocking?
Even “Child Porn” isn’t nearly as cut and dried as most people think. Things like /c/tinytitties or /c/flatchested from lemmynsfw are arguably illegal in a place like Australia since the person can be perceived as under-age due to their physical characteristics. It gets worse when you toss in the AI Generated stuff.
Big Tech does a lot of juggling trying to stay clear of these problems and they have large legal teams to help them when they run into trouble. I rather doubt that most instance admins have the resources for it.