I think you're right that DMCA will be effective but my guess is that meta will actually be able to federate just fine. As for moderation, they're already the best at it. They can simply allow or block federated content as they choose, just as easily as their own content.
But the content doesn't cease to exist... its just going to tell people "hey, join this better non-Meta branded Fedverse server, and look at all the banned content you want! And now Meta cant ban you for having opinions about things!"
They have done the opposite of a moat... they built a bridge across the moat that is around the prison island everyone is trapped in.
It's like suggesting gmail would fail because they have spam filters. People actually want moderation. As long as it's mostly good or at least consistent, I expect Meta to find success. I also expect a wide variety of more lax/niche aggregators to also find success.
Meta's moat will be that they will be the largest home domain. They'll have the most user data and they'll have a secured user base even if the fediverse collapses.
