There are two differing thoughts on federation I have seen.
That servers/instances are only a means to provide people access to the network. They should be not gate keep or restricted access to the entire network. In this case it's like email were you expect to be able to send anyone a message no matter who is their provider. In this case blocking instances is only to stop malicious and misbehaving instances.
As a way for seperate distinct communities converse with eachother. In this case if there is an instance that is detrimental to the culture of your instance you can block it from interacting with your instance.
While I appreciate the theory of the first idea in practice I believe second out come can't be stopped as people self sort into communities.
They are explicitly trying to make a safe space for their users, and they are very explicit about that. The good thing about federation is that you can decide what kind of community you want to be part of, and there are plenty of instances with a more open policy.