The key word here is “large”. From the article:

“[Fediverse] instances don’t generally have any unwanted guests because there’s zero incentive to grow beyond an ability to self-moderate. If an instance were to become known for hosting Nazis —either via malice or an incompetent owner— other more responsible instances would simply de-federate (cut themselves off) from the Nazi instance until they got their shit together. Problem solved, no ‘trust and safety’ required”