They can block specific communities like lemmy.world did with the major piracy community. If they have a problem with a specific community but not the rest of the instance, they didn't need to go so far as to defederate from the entire lemmy.blahaj.zone instance, though given current tensions between the two instances I doubt they'll be missed. Either way, it is a massive strength of the fediverse that when admins make these decisions, users can easily leave and move to another instance with very little hassle