Since blocking an instance as a user just ain’t possible yet

I don't think that would solve the legal issue so it doesn't really matter in many cases. Even if you personally blocked an instance, your home instance will still recieve copies of that instance as long as someone else is interacting with it. And with that comes the fear of unintentionally hosting something illegal on your instance becasue you have the copies from that other instance.

So again there would be no other solution than defederating.