"the company looked at the history of social media over the past decade and didn’t like what it saw… existing companies that are only model motivated by profit and just insane user growth, and are willing to tolerate and amplify really toxic content because it looks like engagement… "
First: They did actually end up removing this and making it configurable, check the bottom of the page. In a vacuum, the idea to stop cut-and-clear racists and trolls from using Lemmy is not something that’s too controversial. Sure, they are being hard asses about changing their mind and allowing instance owners to configure it themselves (and I’m glad they changed their mind). But there’s a big overlap between passionate and opinionated people, so they have to be at times to ensure a project doesn’t devolve into something they can’t put your passion into anymore.
Second: I mean… what do you expect? In the issue above they actively encourage people to make their own fork of Lemmy and run that if they don’t like something from the base version of Lemmy, so I kind of would assume they do as they preach. Instance owners also have the option to block communities without defederation. Lemmy.ml is basically their home instance. If anything this is a reason not to make an account on lemmy.ml, but as long as that doesn’t leak into the source code of Lemmy, who cares?