The instance seems to be mostly right wing trolls. I know defederating is unpopular but I don't think much is to be lost in this case and it can save the mods some headaches.
Edit: the response on exploding-heads.com to my reporting of transphobia. Courtesy of the "second in command"
If we're losing our minds over ~20 active users, then we have way bigger problems than that instance.
EDIT: Just to be clear, I have no issues defederating with an instance like that. I just don't think it matters much either way.
Why wait until it becomes a problem? The_Donald literally started as a joke brought over from 4chan. It grew and over time it basically went from "too small to do something about it" to "too big to do something about it" (to Reddit admins at least). Why even give these people a platform? We don't have any reason to give them space to grow.