How does that translate to moderation?
Some of us remember the Wild West. *shudder*
So, the way Mastodon/Lemmy are structured is similar to email or the web. Each Mastodon/Lemmy instance is it's own thing, and unless they disable the feature (which Truth Social does, for example) then the various instances talk to each other to allow users to interact between instances. Each instance can moderate it's own instance however it likes, and can block other instances from talking to it if desired (called defederation). There is no central control or moderation that extends between instances.
So for Lemmy, the admins of an instance have the same sort of level of control of that instance as Reddit admins do and individual community moderators have control of their communities. A given instance presumably talks to other instances and shares comments and communities between them, allowing users from one to comment on threads on the other and so on.
For example, there's a Lemmy instance called lemmygrad.ml that is more or less explicitly communist. There used to be one called burggit.moe that was contentious because it allowed loli. There used to be one that was more or less openly white supremacist called explodingheads.somethingoranother. There's one called rqd2.net that's created by a radqueer weirdo to talk about radqueer stuff. DBZer0 is largely about piracy. Probably the largest instance is lemmy.world and it's pretty middle of the road on most things. The instance I use is lemmy.SDF.org. All but those last three are/were pretty commonly blocked by many instances.
So, let's say the admin tankies on lemmygrad.ml don't want to communicate with anyone on explodingheads because they're a bunch of Nazis. Lemmygrad defederates form explodingheads and now explodingheads communities do not appear on lemmygrad and vice versa and users on lemmygrad cannot see any posts or comments by users on explodingheads - as far as anyone using Lemmygrad is concerned, explodingheads simply doesn't exist and vice versa. If Lemmygrad didn't choose to do so, lemmygrad community moderators could choose to ban explodingheads users or moderate posts/comments by them. If they still yet didn't then you as an individual Lemmygrad user could choose to block individual communities from appearing in All, block individual users, or block anything explodingheads from appearing to you. None of this prevents explodingheads from existing as such, and none of it prevents users on any other instance from being able to see or interact with explodingheads users should they choose to do so - there is no protocol-wide central command or trust and safety, in the same way there's no protocol-wide central command or trust and safety for HTTP or email, but individual websites or email providers can block connections to others or moderate what happens in their own backyard.
I personally use SDF's Lemmy server. SDF doesn't defederate. Which means that my All feed includes anything from anywhere, unless I choose to block an instance or community from my listing. But if I used say Lemmygrad instead then any post, comment or community from any instance on the blocked instances list at
https://lemmygrad.ml/instances would be missing. Most instances have their own version of that list posted publicly, just like most have public modlogs.
Beyond that, individual community moderators can moderate as they see fit for their community. So if you found a sufficiently anything goes community on a sufficiently anything goes instance you'd have something like The Wild West, but most instances and most communities don't go there and any that did would likely get defederated by several of the larger instances for being more trouble than they are worth.
A common one that isn't defederated super often but lots of individuals block is lemmynsfw.com, which is almost entirely porn communities. A lot of instances explicitly do not host porn communities, meaning you can eliminate 99% of possible porn from appearing in your All feed by blocking the one or two instances that host most of it as an individual. Very little of it ever makes it to the top few pages if you sort by Active (the default) anyways, but if you want to be sure...
TL;DR: It's better not to think of Mastodon as "like Twitter", but "like a bunch of little Twitters that can seamlessly tweet at each other if they so choose", and likewise for Lemmy and Reddit.