It's like watching the history of internet filesharing and warez from the 90s on a speedrun. LW happened to be the most populous instance by chance, and the nature of federated network means the admins can get legally held liable for contents they didn't choose nor wanted to host, because all it takes is another federated server going rogue.
Sure, freedom of speech is fundamental. But it's a hard place between "saving yourself from financial and legal troubles" and "betraying the (vaguely defined) principles". When the crowd is shouting "freedom of speech", they don't just want a nice speech for an announcement; they want the admins become a martyr for the cause. And shit, what for? For some vague internet fame?
Had lemmy.ml become the largest instance, we would have potentially watched this unfold on lemmy devs themselves. Knowing their political affiliations, it might have turned into a different scenario. Legal threats might have been rebutted in an open way that even pleased the "freeze peach" crowd despite the "tankie" accusations. Perhaps all the extra pressure and legal threats meant Lemmy development come to a halt and slowly decline. But no one knows, really.
I don't condone nor condemn LW or its staff. I wish they didn't have to carry the baggage of becoming the guinea pig of this ongoing experiment.
I think people also for some reason think they are entitled to free speech, a.k.a. they can do whatever they want, and virtually any space they please. All it tells me is they lack a fundamental grasp of what the first amendment actually is and what it guarantees. I think they also forget the Internet operates outside of the US. 
I agree however I'd like to add that I do see piracy as being, at least partially, a social movement. Perhaps it isn't apparent to everyone, or right now, and maybe it'll never become anything, but still we should respect that there are different points of view on topics such as copyright. So I understand when people call it censoring when they have that point of view.
I just think vague gestures (not your doing) to someone’s personal interpretation of what free-speech is, which is generally “I should suffer no consequences for anything I say or do,“ hits a wall when it comes to asking somebody to host conversations and possible links to pirated content on their own servers. Especially when they are doing it on their own dime as a hobby and don’t have a legal team to protect them from the feds.
Yeah I just can’t imagine running an instance. Minimum hundred dollars a month so I can constantly police content just to make sure people aren’t sharing CP or pirated content or otherwise illegal content all on my storage.
They banned some piracy communities citing they don't want to be liable (seems reasonable to me but not sure how much merit there is there). Now people are screaming "censorship."
big yikes. i mean i'm no stranger to piracy communities but like...couldn't they just take the respective communities and spin up their own lemmy server somewhere else where the lemmy.world admins have no power? isn't that the point of this whole fediverse thing?
Having the communities removed does not prevent them from starting their own instance. They weren't even being hosted on Lemmy.world to begin with, so nothing has changed for them other than unmitigated posting/presence on world's instance. Any user who wants to participate in those communities still can. Nothing is stopping them.
I just think there is so much drama happening because people don't understand the fediverse yet combined with this incessant need to catch "power tripping mods" on forums. Because something sounds bad and some alt-right troll rolls in stirring the pot, people suddenly start crying "FREE SPEECH!" when the content they want to see and comment on is just one keyboard stroke away.
So right now you are on a specific instance of lemmy or Kbin or whatever your preferred fediverse system is. Lemmy.world is an instance. Beehaw.org is a lemmy instance. Users can create accounts on both and can browse the content of the other instances, unless the instance they are on (let’s say 1) defederates from the other (2). Then you cant browse the other instance(2) from within the one (1) that chose to defederate. The content from 2 doesn’t appear anymore on 1. But there’s nothing stopping you from browsing either.