I see that communities have their own rules that they set, but do instances have their own as well? Do some instances ban NSFW communities?
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Instance rules generally only affect communities that are hosted on that instance. Instance owners can block NSFW content and set whatever rules they want for local image uploads (or disable them entirely), and have the ability to blacklist individual Lemmy instances if they don’t like them.
So if I were to block NSFW content on lemmy.tf and you post an NSFW-flagged post here on lemmyworld@lemmy.world, it should be filtered out on my instance. But I have no control of the general moderation otherwise.