Administrators have full control of the content they accept and they decide whether sensitive content (violence, pornography etc.) is displayed by default or not.
Being free doesn't mean being above the law! Each PeerTube hosting provider can decide on its own general conditions of use, abiding by their local laws.
But what if you need to serve more users? That's where PeerTube's federation feature shines. If other PeerTube instances following yours, chances are they have decided to mirror part of your instance!