So, in the perfect world, you have all these nodes with different levels and types of moderation and people can communicate across them, but pick the level and type of moderation they want by what instance they use, right?
The reality is, no one has a good idea how to moderate something at that scale, even with the resources that come from have a walled garden. You don't even get that, and you want better moderation to draw people away? No one is doing it.
Then, on the other end, you want someone to believe in free speech enough to host the completely unfiltered one, and not baulk at some point when abhorrent shit is on their server? You just end up with a nazi server run by nazis, because those are the only people who actually want that.
It's "solved" only in theory, in practice, there is no practical draw for real-world users.