"the company looked at the history of social media over the past decade and didn’t like what it saw… existing companies that are only model motivated by profit and just insane user growth, and are willing to tolerate and amplify really toxic content because it looks like engagement… "
Where are or were those checks exactly in the Lemmy software code? Yeah.
If they were on the lemmy.ml instance, it's in their right to do so. It's their instance. The basic codebase, which other instances are using, has nothing to do with it.
Finally someone with some sanity here. Any instance can have their code modified in this way from the original and you might never know.