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"
I was banned from r/GamingCircleJerk for 'transphobia' because I said they were wrong for harassing streamers for playing Hogwarts Legacy and that the over the top attacks on a video game were causing harm to trans causes.
We run into that problem a lot. People get high on righteousness and any attempt at moderation is seen as being from 'the enemy'.
I think the opinions expressed by the person in the OP's screenshot are heinous and people who share their opinions cause real harm in society. However, there is a major difference between having bad opinions and posting an address of a Jewish Synagogue with instructions on how to make firebombs. De-Federation should be used to cut ties with instances who promote calling for violence, sharing abusive content (like CSAM) and spreading hatred.
I'm of the opinion that people who have wrong opinions can be reached and that we have a responsibility to have a dialog with people with whom we strongly disagree. That responsibility ends when the person or group descends into actual violent acts. That's the line for de-federation, in my opinon.
I definitely agree.