It's to allow people like Gab to use the service/software but also to stop them from invading other places that do not want to see that content.

Gab got hit hard when they were running a non-Mastodon server/software they made and thereby used the Mastodon project because it was free/libre open-source. Mastodon's community went "uh, no." and blocked them because despite being technically allowed, they didn't want the alt-right.