There are multiple reasons: If you want to fund your instance by donations, you need to be able to act under your real name. You might get away with a totally anonymous instance which you are funding via cryptodonations and which you are hosting at a provider who really does not care about KYC, but that is also illegal in many jurisdictions. There is totally a case for a lemmy instance admin to be known publically, to be able to interact with the community in person, to be able to go to meetups or to be able to give talks at conventions.

And if you are not living in some country with totally crazy politics, most local laws are totally fine. Do not post hardcore pornography. Do not spread hatred or calls for murder and hate speach. Keep the piracy a little bit less obvious. Don’t allow hardcore pornography and have a solid process to keep child porn from your platform. That might be different if you’re living in Iran, Saudi-Arabia or Afghanistan, but in a western country it is totally ok to be in line with local laws.