I was strictly replying to the part of your comment where you said they made a decision to try to be one of the largest instances – imo they did not make a explicit decision to try to be that, but rather the growth was a side effect of the circumstances around reddit users checking out the fediverse.
Is closing registrations is better than having an application with questions that weed out low-effort users? IMO it’s probably a wash. beehaw has only banned one user from the local instance that I know of, so the application process seems to be working overall. The issue is that other instances are growing too quickly and needing to moderate those users, not their own.
I do agree this isn’t great for the threadiverse and I wish it hadn’t come to this, both on a personal and community level. I was subbed to the knitting community on lemmy.world, it was the most active of those communities that I saw, and now I’m locked out. Idk if I want to move to an alt on a different instance, or self-host my own so that I’m fully in control of what I can see, or what. :S