It doesn't. Beehaw blocked LW and SIJW because of open sign ups and, what I assume, was people creating new accounts when their old one was banned.
If you're not on any of those two instances or on beehaw, you're not impacted.
Beehaw is sending a message, imho, that instances need take reasonable measures to ensure their users don't repeatedly commit some sort of abuse.
This raises a question about the use case of user-only instances and community-only instances which might not be a bad idea.