This is correct, but I think it leaves out that the proper way to protest mods is to create an alternative sub. So mod elections aren’t really needed - if users disagree with a mod’s actions, they can just go to another sub. If one doesn’t exist, that means not enough people care for the original mods.

Replacing mods by force undermines the whole system - what is even the point a mod if you have no say in what your subreddit is like? That is also what makes federation so enticing - by self hosting, you have the ultimate say in what your server does, and people can either choose to federate with you or de-fed if they disagree with your actions. That’s a much fairer system.