What I want to know is, despite the amount of Hexbear brain rot over there why we are still federated with them? It seems really weird to continue to give them platform on our instances.

The first one is a bummer. But the second two if you know how to fully utilize them can be extremely useful.

So their tactic is boasting about breaking mods and making idle threats to try and scare normies while doing what they’ve been doing, applying fixes and having new modded versions come out that work just fine?

They did this same thing saying they’d ban people for blocking ads a while back, also astroturfed to hell on Reddit trying to scare people. Ultimately nothing really came from it except a whole lot of fear mongering.