The instance seems to be mostly right wing trolls. I know defederating is unpopular but I don't think much is to be lost in this case and it can save the mods some headaches.
Edit: the response on exploding-heads.com to my reporting of transphobia. Courtesy of the "second in command"
How does one mute an entire instance?
You can't do that yet as a user, but it's an option that's apparently in the works, if I understood correctly.
Community blocking was a recent addition, instance blocking for users is coming. I don't think the massive growth of instances could be expected so I understand the prioritisation.
I’m not actually sure, honestly. Maybe mute the users instead if the instance isn’t possible to mute.