If you report racism/transphobes/Nazis and your instance doesn't ban them, time to move instances.
If you don't move instances and complain about moderation on Fedi, your complaint is invalid cause you've proven to be on an instance that has bad moderation and chose to do nothing to avoid it.
Report posts. Moderators don't see offending content if you don't report it. If they do nothing about it, leave.
And yes, you CAN report "private" messages or followers only posts, but BeAware that the moderator will be able to read the interaction.