The downside is that if you’re new to the fediverse, you have no way of knowing whose lists you should follow.

Isn’t the whole idea that you choose a trans-friendly instance and you naturally adopt the instance wide blocklist? Same thing here, except you choose the block list similar to choosing an instance in the old flow.

And if you disagree, this could still easily be mediated. For example, the instance could have a default block list. As long as one can opt out, that would respect user choice.

Or choosing the blocklists can be part of the account creation flow.

There’s others ways to go about it.

Beyond that though, on an instance like blahaj, it would be largely irrelevant, because there is no scenario where I let transphobes federate to the instance

What I suggest isn’t meant to take away the instance owner ability to defederate or moderate. But this makes it such that you don’t have to modify your moderation strategy when your users can adopt different moderation in addition to what you have. (example: maybe a large group of your users want to block US-centric content, or political content, etc.) and people not on your instance could possibly adopt your moderation as well!