A big instance threaten to defederate, but that's something that will cost them.
If you're running an instance you're basically getting free content from the other instances through federation. By defedearting you're saying "no thanks, I don't want that free content on my server!" So it's a little self-destructive.
Combine that with the fact that users can more easily switch to another instance than they could moving from Digg to Reddit, or Reddit to Lemmy, there's more downsides to defederating than upsides.
So it's like a hostage situation where you have the gun pointed at your own head. Nobody wants to see an instance kill itself, but that's not enough to give them significant leverage.
There will be more disagreements over moderation than anything else. We've seen this happen already. "The users from your instance are shitposting in the communities on our instance, so we're cutting you off." But that results in a case where site that's blocking gets less content than the site that's not. But it solves the shitposting problem for the users of that instance, but it's a blunt tool that has negative repercussions for the site that's blocking.
I think there probably just needs to be more ability for users to block content themselves to avoid tensions over defederation over moderation disagreements. But I'm not sure how that would work.