What do you do if someone creates and abandones an important community on your instance? Leave it unmoderated?

Remember: Each instance is it's admin's private property. Everyone on there (including moderators) are guests. An admin is totally in their right to remove troublesome moderators and these moderators are totally in their right to create their own instances.

Think of instances like connected online forums. Whoever owns the forum has the right to do whatever they like, including removing mods or even shutting down the instance if they please.

Of course, just removing mods isn't nice, and the mods are totally in their right to protest, stop doing their work or even leave.

Depends on the cultural rules tho. You can't just create any community on someone else's server and feel entitled to not have to follow their rules. There's a reason why there's a hirarchy, and the mod not being the admin. The mod can run their own server if they want and/or need to.

The point of being an admin is that you can edit and change everything that is posted. If someone does something illegal on your instance, or they're posting stuff you don't like (racism, homophobia, etc) you need to be able to fix it.

Admins have always been able to modify posts. See Reddit, forums, etc.