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"
Let's wait for per-user instance filters to be implemented, then everyone can block instances to taste. As long as their users don't cause trouble in our communities, there's no need for our instance to act as a moral guardians and decide what our users can and cannot see. Defederation is a nuclear option that should only be done if their instance is disrupting our instance's operation (spamming and breaking rules while in our communities).
I like that sh.itjust.works currently federates with almost everyone, and I can see a big part of the fediverse from here. It would suck having to visit multiple instance to see the whole fediverse.