Exactly. Imagine if Lemmy instance owners became legally responsible for everything that was posted on their server! Especially with the way federation works - instance admins would be having to de-federate from every other instance on day 1, and would basically have to approve every single comment on every single post to ensure they didn’t get in trouble with the law.

This is a terrible idea. It means a single bad actor could bring down a small social media site by themself really easily just by spamming illegal content and reporting it to the police themselves.