Over-moderation can lead to a different kind of toxicity. Think r/twoxchromosomes or r/conservative. Don't agree with the mods? Straight to jail. Say a word on the banned list? Straight to jail. Mod having a bad day? Believe it or not, also jail.
As with everything, moderation is key (get it lol, it's a pun) (you get it right) (I'm so funny)