The ol' 'let them do harm and build evidence' ploy, eh? Boy, but I am tired of seeing that old cliche trotted out. We know they do harm. As stated, there is no argument FOR federation with Meta that doesn't ignore or accept user harm as some kind of collateral damage, or here as you suggest a way to build evidence. Sorry, Trans people (as an example), but you're going to have to live with a firehose of abuse while we build a case to shut off the firehose we supported connecting to: is that really how you envisage it working? To me that's wholly unacceptable. And for the record Trans people are already seeing abuse from Threads. Championing a protocol at the expense of users is ludicrous and completely counter to the ethos that built the Fedi in the first place.
If Mastodon has entered into a legal agreement that prevents them from acting with impunity towards Meta as they would with any other Fediverse server, then that's their stupidity and they have become a vector for abuse that all other servers should take stock of.
And if they're at the point where they cannot stem the flow of harm, or have accepted a certain degree of it in order to make the federation work then they really can't be called a "good faith" server any more, can they?
Blocking a server over the lack of a block is absurd
Are you telling me that a server unable to stop paedophilic content from another server would not be blocked by the rest? Of course it would. And you'll recall .social was widely Blocked/Silenced when it struggled with Spam accounts not so long ago. Nothing is too big or important to block, as long as users are informed and have the choice to place themselves back in harm's way should they wish to. What's absurd is your suggestion this is absurd behaviour when in fact it's fairly commonplace.