Difficult question. I think it’s realistic. Hate speech laws are enforced against individuals on a regular basis. If a German instance tolerated illegal content, then I expect the instance would sooner or later be involved in a prosecution. The prosecution would be against the user, though. The instance would only have to provide data to police. I’m not sure at what point the instance owners themselves would be found to violate these laws.

Apart from that, the instance is required to remove illegal content per the DSA. I think it’s realistic to expect that a prosecution would lead to a closer look at the instance.