If you have examples of relays differentiating themselves based on moderation policies, it would be appreciated. Not just "we are extreme free speech holders" vs "we pay attention to some laws here". What nostr relay is actually running a strict filter, or do any type of analysis on the message content beyond "payment only"?

as if instances have not gone down with users identities.

If instances go down, there are still lots of possible backups: someone can recover the domain name and regenerate keys (or even recover a database copy). If someone loses a private key, there is no turning back. The fact that (some) poorly managed system are not recoverable does not mean that it is as fragile as something as nostr that gives up completely on making it.

allowing users the ability to drive their own experiences.

The same can be achieved on ActivityPub, no new protocol is needed for that.

Also, this is not matter of individualism, but of UX. It's "nice" when users have the ability to make decisions on their own, but it is terrible when they have to make all decisions on their own to get started.