Fair.
I hope that the Blahaj admins hold queer people as more important than this behaviour and take action, so that we can federate again, I actually like some of their content. I think they will, if their previous statements are anything to go by, but we will see from this what their real priorities are.
If I were adminning Blahaj I would purge the problematic 196 mod and replace them, as well as adding several significantly better mods to that team. This isn't complicated to resolve without losing the users, the mandate for removing a problematic mod like this is going to be very high. Exert some authority.