Allowing communities to decide for themselves: Great.
Banning anyone who wants to use your supposedly open source & decentralized software from using certain words that you deem inappropriate in American English is not acceptable. Spanish people are not allowed to use the word for the color black, for example.
"Fascism" is correctly used to describe a set of far-right ultranationalistic and militaristic ideologies that are directly responsible for the deaths of millions of people. If you're going to use that label, I want to at least see overt racism if not actual calls for violence.
This example is particularly egregious because the brand of authoritarianism we're looking at is antifa, which quite literally defines itself in opposition to fascism. The far right does not have a monopoly on authoritarianism, and using the word "fascist" to describe left-wing authoritarianism gives up rhetorical ground that you don't want to sacrifice.
FWIW, in the context of the fediverse where there are reportedly instances run by actual neo-Nazis, it's both wrong and confusing to label someone a fascist for instituting a policy designed to keep those people out. You can disagree with the policy, but it's particular important to choose accurate labels here.