I will copy/paste the excellent starting point written by @captain_aggravated@sh.itjust.works:

If I were to write such a standing policy for defederation, I think it would read something like this:

Admins of sh.itjust.works shall defederate with another instance immediately when that instance:

is operated for the purpose of hosting bot accounts for the purposes of spam, scams, denial-of-service attacks, or other traffic generally unwelcome or disruptive to the Fediverse.

is operated for the purpose of posting commercial advertisements to other instances.

is operated primarily for the purpose of illegal or harmful acts, such as sharing child pornography, human trafficking, inciting/facilitating acts of violence or terrorism, etc.

is operated primarily for the purpose of political extremism/radicalization to include rampant bigotry, racism, sexism, calls to violence.

is generally operated in good faith but some temporary issue such as a credential theft has deprived the genuine admins of control of the instance and problematic posts/communities/members are being created. The admins may defederate or refederate as needed to meet this condition.

Admins or members of sh.itjust.works may call a member vote in the Agora on the matter of defederating when another instance when that instance:

was historically operated in good faith but has more recently entered a state of low moderation; illegal/immoral/spam traffic is posted against the intsance’s own rules with no attempt to moderate.

is a very small instance operated by one or a few individuals to circumvent a ban if ban-worthy behavior continues.

A non-emergency technical issue arises, for example an instance starts sending garbled posts which fill feeds with nonsense, members may request temporary defederation until the glitch is resolved.