No, defederating would block all flow between instances. The problem is with hosting content that you don’t want to or arent allowed to host. Currently if I view a image from burggit, the image gets saved to the monero.town and then served whenever someone else views it from there, which is a problem. If instead every time someone wants to view that image, it gets pulled from burggit again, monero.town isn’t in trouble for hosting it anymore.
Looks like it’s quite popular in Japan.