Definitely, but they had a period where unmarked nsfw was ending up in everyone's feed when people forgot to manually add the tag, which was very annoying.
The illegal stuff is a threat to all instances, regardless of NSFW, as accounts can spam it anywhere.
Still all boils down to us as users reporting it correctly and the admins being available to resolve it.
The latest post on firearms@lemmy.world is NSFW and has been up almost a day without moderation, despite being reported. So a lack of moderation can happen anywhere.