My experience of community-moderated servers is that someone doing that will be banhammered quickly before they actually ruin the whole session, same with cheat

My experience of community-moderated servers is that someone doing that will be banhammered quickly before they actually ruin the whole session, same with cheaters. The moderation on these larger platforms is shit because it's so slow, even if it does eventually come down. (same as real-world justice: when it's excruciatingly slow people lose faith in it and it arguably fails to do its job). The problem you mention is a problem of global matchmaking being the only option for playing the game and this kind of moderation is the cheapest option when you do it, so while microsoft moderating stuff is better than them not moderating things, the fact is they have removed the tools needed to do much better moderation in the push to remove community servers in the first place.