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"
I think the responsibility lies on the owners of each instance to manage trolls on their instance. If they moderate responsibly and shut down the Nazis and trolls, nobody will defederate them. If they don't moderate effectively and their instance turns into a cesspool, they'll get defederated by everybody except other trolls.
That's the whole point of the fediverse. You run your instance, and based on what users on your instance do, other instances decide whether or not to federate with it. And if that results in multiple federated networks that don't federate with one another, that's fine too. You can't keep fascists or tankies from downloading server software and setting up an online forum. But you can keep them out of yours.