I personally find beehaw's moderation weird, I get that you're trying to create a safe and regulated space, but you simple can't do that with 4 mods on the entire instance. I do think that their decision to jump to defederation is a result of these 4 people being overworked and simply not having the time to rationally evaluate the situation.
if they want to continue like this they'll have to evaluate on whether to appoint proper mods to their communities or just decide to change their stance on "safe" content.