The main thing that made Lemmy succeed was structural: no matter how bad an admin team is, you can limit their impact on your experience, by picking another instance.
The main focus of the text is something else though. It's what I call "the problem of the witches".
Child-eating witches are bad, but so is witch hunting. People are bound to be falsely labelled as witches and create social paranoia, and somewhere down the road what should be considered witch behaviour will include silly things with barely anything to do with witchcraft - such as planting wheat:
- if you're planting wheat you'll harvest it.
- if you harvest wheat you get straw.
- if you get straw you can make a straw broom.
- if you make a straw broom you can fly on the sky
- conclusion: planting wheat is witchcraft activity.
However, once you say "we don't burn witches here", you aren't just protecting the people falsely mislabelled as witches (a moral thing to do). You're also protecting the actual witches - that's immoral, and more importantly it's bound to attract the witches, and make people who don't want witches to go away.
In other words, no matter how much freedom of speech is important, once you advertise a site based on its freedom of speech you'll get a handful of free speech idealists, and lots of people who want to use that freedom of speech to say things that shouldn't be said for a good reason.
That harmed a lot of Reddit alternatives. Specially as Reddit was doing the right thing for the wrong reasons (getting rid of witches not due to moral reasons, or thinking about its userbase, but because the witches were bad rep). So you got a bunch of free witches eager to settle in whatever new platform you created.