It’s an open source project. It has no investors driving it toward user hostile profit seeking which is the primary force behind enshittification. A large user base doesn’t cause it, merely triggers it where the cause is already present.

Blocking an entire instance is still blocking.

There’s no feasible way to stop people of a specific ideology from using an open source piece of software. You say blocking isn’t the answer but I’m not sure what more you can expect. Even if you invent some kind of automated Nazi detector, what action can it enforce beyond banning or blocking?

The most realistic solution I can think of is letting instances or users subscribe to curated blacklists. Something akin to Adblock or email server spam blacklists.