I think individual instances should take whatever stance they want. If you don't like it, you can choose a different instance. And if you DO prefer a space without bigots (as most people do), you can use an instance which takes a hard stance against bigotry.
I personally couldn't engage long-term with any instance which doesn't stamp out bigotry. There's no reason to expose myself to bile like that on the regular.
Wayland, because I'm late enough to the party that I started with it and haven't really had any issues.