There's a difference between defederation policy and ban policy. You could have a server that is very slow to defederate, only defederating for abuse and illegal content that can't be stopped through moderation, while implementing a standard or even fairly aggressive enforcement policy for individuals, both local users as well as remote users. The idea is that you ban offending users, while only defederating when the instance itself is the problem.

Defederation splits the network apart. Trying to make defederation a last resort doesn't necessarily mean one is a freeze peach instance. Defederation policy is an entirely different beast from moderation.

That said, my understanding is that Lemmy's moderation tools are pretty lackluster at the moment, and so a big part of the reason that some instances are quick to defederate is that it's difficult to moderate between poor mod tools and small volunteer mod teams. It's easier to just defederate.

I agree though that the freedom of FOSS moreso lies with admins, as they're the ones deploying the software so they can choose how to run their instance, whether that means federating with everyone or just running a completely defederated Lemmy instance with no peer instances.