It ignores all NSFW communities. I'm planning on adding a switch for that, but if you really want, you can change nsfwFilter property in local storage through devtools. all is for everything, none is for no NSFW and only is for only NSFW communities.
Sometimes it fails to follow a community. Maybe it's because community is not yet "synced" to the instance you logged in from. Don't know much about exact reason, because I'm new to lemmy from the tech side.
There is also a planned feature to exclude whole instances. Currently only possible with editing local storage.
What's weird to me is I saw the edit (with the link) on this account, my main account on lemmy.world, when you first posted it, since I clearly followed the link to try it out. I don't know if all the DDoS stuff messed something up or the admins had to restore from an old backup or something, but that edit with the link isn't reflecting anymore on my lemmy.world account or my alt at lemm.ee.