A moderator should be able to view a users details and reports about them. Having no access to the (limited) user view has a real impact on judgement calls for a moderator.
A moderator can virew the uses details - like previous reports and their e-mail address. And their IP address, if not disabled by the server admin.
A moderator is not able to hijack access to DMs. Even an admin can't do that from the interface. It is possible, but requires access to the database and being able to run queries and/or exports there.
It always remains an issue of trust. Larger instances can't be run by a single person, so you'll have to trust the admins to pick the moderators wisely.
If you are not okay with that, you can always spin up your own instance. That gives you full control, but can also be a burden because of the responsibilities that come with it.