This isn't rocket science. First, let instance maintainers handle bigots, spammers etc. on their own instance. If you still find that instance contributing with too much crap in your feed - block those users or the entire instance. I've blocked several accounts and a couple of instances. It's very easy to do.

And again, there could be a number of tools and features created to help users block stuff. Use your imagination. A user with an orange warning triangle is harassing you? Well that triangle means that user is in one or more block lists for problematic behavior - do you want to use any of those block lists? Click a button. Or whatever. Just let the users decide and prevent instances from creating a cascading instance-blocking that puts the fediverse at risk.