> The host of the ActivityPub site doesn’t have to do all the moderation
The person who set up the server doesn't, no, they can appoint moderators that lack administrative privileges. I don't recall at the moment if moderators have the ability to federate/defederate with peers, and that might be an implementation detail anyway. This is probably the way a large well-run node should work - developing a team of moderators from within the community.
> there doesn’t seem to be a reason that users themselves couldn’t “mute” troublesome posters from their own feeds, right?
This is true as far as it goes, but if a node federates with peers that dump a high volume of content onto the network the user doesn't want to see, then the user will find it a headache to manually filter just what they want to see (approximately the feeling of manually filtering out email spam). So some filtering should be done by the host.