What reason? I understand that there are moderation problems there but as it stands they're not super bad and can typically be handled by banning the users and communities from our instances. Defederation would be if there is a persistent cultural problem there (such as an instance with a dominating toxic atmosphere) or a large volume of spam users and communities, which so far doesn't seem to be a huge issue, at least not enough to warrant defederation.
Dream weasel is from shitjustworks. Looks like they're just memeing and/or doing that "I don't like furries and want the world to know about it" thing.
So they're basically making false/unmerited claims about something quite serious as a joke? Good to know. I suspected as much but I wanted to be sure before reporting them.