With that being said; I do fully support an Instance's choice to federate, not federate or even limit their federation with them.
In most cases this should not affect instances; but unfortunately there are people who will ignore all warnings and use the Fedi Garden as a whitelist instead of a list of instances that you know will handle policy violations quickly.
On the other hand I absolutely also respect the needs of communities who ABSOLUTELY, POSITIVELY WILL NOT TOLERATE instances who choose to federate with either X, Threads, or any other instance they deem to be too toxic to play nicely. As instance operators you absolutely have the right to block problems BEFORE they happen, and if you happen to KNOW an instance will absolutely be a HEADACHE, you have every right to say NO. If the users do not like your decision; they are free to find a better instance for themselves; or spin up an alt account on a better instance.