Because someone can just host a CP instance and now that instance even if defederated from other instances still provides a safe space for pedophiles to share content and other illegal stuff.
That is no different than someone just hosting their own webserver for the same purpose. They would find themselves in jail pretty quickly. If they do federate; they would be announcing their own existence. That would not be in their interest if they wanna fly under the radar.
Regarding names, I don’t really know. Maybe instances can have blacklists of allowed names, if they care about it. Perhaps they leave the responsibility of blocking users you don’t like, to you.