The instance seems to be mostly right wing trolls. I know defederating is unpopular but I don't think much is to be lost in this case and it can save the mods some headaches.
Edit: the response on exploding-heads.com to my reporting of transphobia. Courtesy of the "second in command"
I settled down here, exactly because it only has one blocked instance. The vibes I got when I created my account were "chill place that lets adults curate content themselves". We're free-signup and create our own communities, I doubt the admins here will just go ahead and defederate other instances left and right. I wonder, though, why aren't you on Beehaw? They seem closer to what you're looking for.
His suggestion is not a bad one. You're clearly after a more heavily moderated experience, that's what Beehaw provides.
Your reply is basically 'if you disagree with me you're a racist', that's not a way to have a conversation of mutual respect. You're not earning any points by attacking people who disagree with you.
The difference is this: I like it here, you don't. So why would I move elsewhere?
At that point though again, why don't you just go to a more heavily moderated instance (which there are plenty of) rather than demand heavier moderation on this instance? Also, wanting a more relaxed standpoint on defederation, I can't see him wanting to move to a server that's likely to be heavily defederated by other instances itself.
Sounds like you should move to beehaw