@terryenglish is your point that you prefer centralized system where a single central authority decides everything?
In my view, federation seems better. If a situation like you describe happens, the thing to do is either to influence the admin to change policy about blocking the other one, or else move to a different instance that works better for you. You have options, in contrast to the centralized case where you can't do anything if someone get blocked.
@terryenglish I'm sorry to have misunderstood you.
How I came to that, was from your statement that "federation is not a good moderation tool". Because how moderation happens is very important, my thinking was that you preferred systems where moderation worked differently.
Anyway, I see now that it was a misunderstanding.
Regarding letting technology work as intended, I think many folks would see one instance blocking another instance as a feature they want the tech to allow.
... but of course I agree that blocking because of admins having a personal tiff is not how the tech was intended to work.
I think in an idea circumstance admins ought to not be moderators at all. They should only be concerned with the technical elements of running an instance and leave the moderating to the moderators (someone else).