What's the bad space? Based on them mentioning block lists, I'm guessing it's a community that gets blocked by a lot of instances?

Fwiw, I think it's totally fine for communities to defederate from other places en masse. The whole point of federation is for small, customized communities. If a community decides it doesn't want x or y, then that's fine. Individuals who no longer feel like they align with the community can find another or create their land.