For any server, I do not defederate them prior to them breaking any moderation covenant.
And for any other server on the Fedi, if the moderators are even TRYING, I give them grace room and moderate out problem accounts and make blocking appropriate to the level of the issue I see. Fediblocking is a nuclear option that is needed for virtually umoderated sites, but for others other moderation keeps our users safe and honors our pledge to the Mastodon Covenant.