That's likely to end up Balkanized like the fediverse, where every instance has a list of other instances they refuse to federate with, often because politics or petty drama. Though to be fair to the fediverse, sometimes it's because those other instances are full of child porn and most people just don't want to see that.
It amuses me that Mastodon Central uses corpo-friendly labels for the sites they won't federate with, e.g. (https://mastodon.social/about)
tsundere.love Suspended (Hate speech)
you**.**ve Suspended (Inappropriate content)
Whereas the more free-wheeling sites, like the ones Mastodon Central blocks, tell it exactly how it is: (https://tsundere.love/about) nadeko.pw CP
mk.fedcast.ch Spam
youjo.love hosts at least one admitted pedoIf you want to follow some CP poster on nadeko.pw then you can ask your admin on tsundere.love to unblock it and he will probably just ban you for admitting you like CP.
Where did we get this idea that federated instances should never block anything? Even warez sites have rules.
weirdly enough that reminds me of wattpad and ao3, where wattpad uses much nicer sounding terms while ao3 uses as accurate terms as possible. (which makes ao3 seem more "degenerate")
A lot of such issues could likely be resolved by a better thought out protocol. There are certainly plenty of self righteous people who would refuse to federate purely on principle but more typically the issue is simply that one does not wish to be exposed to or traffic in any way the content in question. A well thought out self categorization system could largely address that need - you'd only need to refuse to peer with those who failed to apply it. AI also makes any such effort easier than ever.