Fediverse

I think there are a couple of reasons to not allow mods on one instance to moderate posts on another instance.

One example I can think of, if I wanted to grief a community I might go to another instance that doesn't have that community, create it, making myself a mod in the process. Then I would request federation with the community I want to grief. Then I'd mod away all their posts, or do anything else I wanted. With some luck and okay timing I bet a person could do a lot of damage before federation was turned off. People in IRC chat rooms used to use a similar technique to steal OP from others in rooms. Making modding of federated content only effect the local instance would contain any of that damage. As a feature creep sort of feature, perhaps modding done on an instance could send a suggested mod response to the originating instance, and they could do what they wanted with the information.

Also, having it set up like I originally suggested could allow for other non standard federation arrangements. Like one instance that allows nsfw content in a community to be federated with one that auto blocks anything marked nsfw. Maybe even one way federation, where an instance shows posts from another in a community, but it isn't reciprocated. I don't think that would be usually the best idea, but it might work.