The instance seems to be mostly right wing trolls. I know defederating is unpopular but I don't think much is to be lost in this case and it can save the mods some headaches.
Edit: the response on exploding-heads.com to my reporting of transphobia. Courtesy of the "second in command"
But certainly the proposed defederation isn't the same as suppressing utterance, considering there would remain a publicly accessible instance for that speech. This would be closer to keeping in check by public opinion, since it's the action of exterior social forces.