I’d agree with you except the instance isn’t being removed from the site, so you still have the choice of creating an account for that instance, or creating your own self-hosted one instead.

Ignoring the fact that most complaining here are likely members of that instance, I don’t understand users’ insistence that they shouldn’t be defederated. Are most ignoring the numerous examples of Reddit subs users inferred “likely won’t be a big deal” becoming obviously problematic down the line, with the inevitable ban/quarantine occuring with most upset it wasn’t dealt with from the start?