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Why? My understanding was that popular websites removed discussions of sources for piracy so as to not lose advertisers. Lemmy doesn't have that issue. I'm not sure I see any reason not to allow it?
Because the people who graciously host Lemmy for our benefit can get in trouble for it. Let's not bite the hand that feeds us.
That's the entire point of federation. There isn't a single server that hosts all of lemmy. If someone runs an instance, and is ostensibly paying for it, they can choose what kind of content is on their instance.
So yeah, if the people who run a particular instance choose to make that a rule, then that's their prerogative. And vice versa.
This has nothing to do with federation really. You're posting content to platforms hosted mostly by private persons or in some cases small non-profit organisations, that's the deciding factor.
I'm not talking about breaking hard rules here, I'm talking about common courtesy. Even if they don't explicitly ban such content, knowingly posting content that can get the host (again, usually a natural person) in personal trouble is just simply something you should not do. It's a dick move no matter how you look at it.
"Ohhh it's not explicitly forbidden so I can post whate"-no, you'd just be an asshole.
It's a different story with for-profit companies as those don't have a natural person on the hook in the majority of cases. Though I personally think you should still rather abstain from it.