That seems to be their goal, though they are probably targeting specific instances that they notice most often. I think Yiffit tried to convince them to just block NSFW content or just specific communities instead of defederating entirely but apparently that didn’t work - I’m not in the loop on how the conversation went.
This type of post may be better suited to a community like Fedidrama or something but I appreciate keeping track of events like this so that we’re keeping transparency on instances. If no one gives their side of the story when they get banned then we don’t have records in case of admin abuse. Especially in the Fediverse trust and maturity is paramount when choosing instances to build communities on and to be a member of.