They're just normal people running the instance, not a major corporation with a legal team. While it's unfortunate they defederated, it's understandable that they'd rather be overly cautious when it comes to stuff they can be sued for
Yep I love piracy but I have a real life and I’d think twice about what I hosted if i ran an instance…no matter what I believe and the low likelihood of legal consequences. Hosting an instance is a hobby. I have to click two buttons in the app I use to access this place on another account. Who cares.