It depends on the instance rules and admins. On lemmy.ml:
- Nothing happens at the moment the last mod goes AWOL. The community muddles along without a moderator for a while.
- It's not clear to me what happens to reports during this period. I expect admins have some way to see them, but it's not clear how visible they are or whether admins take action on them.
- When a new mod wants to take over, they post in https://lemmy.ml/c/community_requests with a description of why they think the community is unmoderated and a request to take it over.