Yes, and...
From what I've seen, bad stuff has been mostly banished from polite conversation into their own deplorable "freeze peach" bubble.
I know it happens. I know it's on the rise. Thankfully, it's been practically invisible on my instance due to excellent administration.
I think most instances stand by their enforcement codes. They don't want bad stuff posted, because that makes their server a bannable "Nazi Bar", ruining its reputation, one that they paid good money for.
@eniko
That being said - I just had to block the moron above, so "gentle transphobia" and "gentle Naziism" are usually not against codes of conduct.
"Hey I was just asking questions" guys be damned.