Open signups aren't novel on the fediverse, lots of places have them. The problem is having them without following up and banning problematic users... but yes I expect that if stricter instance-wide moderation doesn't happen this instance will end up being defederated by most of the fediverse (with mastodon at least that seems to be the norm).

I'm hoping moderation has been been lacking because Ernest is just overwhelmed with the amount of load, and that it is fixed soon, if not I'll end up moving on once admins start defederating it (probably to another kbin instance).