PieFed has rather strong thoughts on the subject: https://piefed.social/c/piefed_meta/p/1523426/labelling-or-hiding-ai-generated-content.
In short, just as NSFW/NSFL posts or bot accounts are totally fine so long as labeled, so too AI posts are fine... unless unlabeled as such. And if users refuse to label them, then community mods have tools that help them detect and label them for the users.
PieFed's options for AI content are:
-
Show
-
Hide completely
-
Label as AI
-
Make post semi-transparent
This method democratically puts powerful tools into the hands of end-users to individually choose what approach works best for them, rather than e.g. make an authoritive declaration such as defederation of instances that often allow AI content.