However recently (and widely discussed on HN[1]) Microsoft has started censoring the entire ecosystem, to the point where you can get banned from all servers for chat behavior in one server, because your MC account is now your MSFT account. So they can just ban the latter to block you from all of MC (except for cracked servers).
"People doing their own moderation" includes a community of people who get together, appoint moderators, and enforce their own rules.
The people appointing moderators are part of the central entity, unless you mean that the trolls being muted also have a say in it. Show me one such server that is not a tiny one with just a bunch of friends, where moderation is not needed anyway.
For example, I used to play Rocket League. I played either solo or teamed exclusively with a few friends and mutual acquaintances. They have various settings to mute the chat and comments from other people. I'm not interested in all in hearing flames or nonsense chatting from random people I'm playing against, so I have all chat muted except for team chat (people I know and choose to team with). This is doing your "own moderation", and is the ideal circumstance is far as I'm concerned.
Unfortunately, however, Rocket League doesn't allow you do your own moderation, despite the proper tools being available. One time, someone I was teamed with (who similarly had all non-team chat muted), typed something in team chat that ran afoul of Rocket Leagues sensibilities, and they subsequently received a week-long ban. Nobody could see this chat except our team (myself and this other person). We had already engaged in our "own moderation" by muting everyone else. This was an overreach as far as I'm concerned, and would far prefer to have the power to see and hear what I choose, and not what the platform chooses.
This is far, far better than having "moderators". In practice, social media moderators come from the same pool of people that staff low-end call centers. Arming them with ban hammers while giving them anonymity and lack of accountability creates major headaches of its own.
Second Life does have a few paid moderators. A user has to file an abuse report to make anything happen, and in a few days, someone will process the trouble ticket. Policy is not to attempt to intervene in resident to resident disputes at all.
What makes this work is that it's a big, sparsely populated world. A user's radius of annoyance is about 100 meters, and the whole world is about the size of Los Angeles. So, jerks are local, even with over 50,000 people logged in.
The metaverse crowd, if and when they actually create big virtual worlds with large numbers of users, needs to understand this.
Regardless of what you might think, since I'm not a gamer (the isometric Ultima Online was about the last game I was interested in, more than a decade or two ago) this is the first time I heard about it - and it's completely insane. How can we - the industry, the software engineers - allow it? Why do we even turn on the protected mode?
The first post shown, and the first couple pages of results, will help you catch up on the discussions around these methods. I don’t have anything new to offer you that isn’t already hashed out extensively therein. Good luck with the reading, and welcome to HN.
I'd be happy for some moderation to silence all of those people.
If you played 20 years and today, you can surely notice the difference in the community?