The issue last year was with someone, or many someones, uploading CSAM (child sexual abuse material, I.E. child porn). Like, SPAMMING it out to a bunch of Lemmy servers, which then federated it out across the whole network, in REALLY high volume. Obviously, no one wants to see that, but the legal concern is liability. For some servers, depending on where they’re hosted, that means they can be held responsible for “hosting” the content, once it’s been federated to them.