We should do our absolute best to not become a siloed instance. I predict we will start seeing certain instances be almost inaccessible which will lead to their users migrating to more open instances. It’s already becoming clear to me that certain instances will lose users over time if they continue actively segregating their instance from others.
Individual bad actors on other instances is not a good enough reason to defederate. If a troll is bothing someone they can be blocked/banned on sh.itjust.works. I don’t expect instance creators to ban all trolls, it’s not possible.
Defederation should be reserved for severe cases when another instance shows no interest in moderating. The two instances defederated right now are justified: one condones the denial historical events and actively censors opposition, and the other was condoning heinous illegal activies regarding underage individuals. These are two clear examples of where defederation makes sense.
Defederation should only be used as a last resort.
My previous post continues this sentiment from a couple days ago here: https://sh.itjust.works/post/281126
Likewise, there are instance that already have the likes of exploding-heads defederated. This is a discussion on how defederation should be used. And I for one agree with OP, only use defederation when absolutely necessary.