The present moral outrage is over the Threads ToS stating that if your account interacts with or receives a Threads post in any way, Meta will scrape all available data about your account to build a shadow profile of you for tracking and advertising purposes. I'm not even paraphrasing, they're very explicit about it.
Which is exactly the thing people were afraid of when Threads was first announced.
But really the core issue is that most people on mastodon are there specifically to avoid corporate social media. They don't want to be tracked, spied on, or advertised to. The vast majority of accounts are pseudonymous and they like it that way. Privacy is a foundational core value of the fediverse in general.
Many people see the idea of allowing Meta into the fediverse as the antithesis of every value that the fediverse was built on. Which makes sense, as the fediverse was built specifically as a way to escape Meta, google, and their ilk. There is a very real fear that Meta will attempt to destroy federated social media; what possible reason would they have to not? There's absolutely no incentive for them to allow the status quo, and every incentive to destroy a competitor.
But don't downplay the extreme seriousness of the debate. Fediverse users and admins are pretty split on this issue and argument and discussion happens every day. This is not something most people take lightly, and most treat it very, very seriously.
Personally, I run my own server because I find the endless debate tiring and distasteful. I'll block the meta domain based on their ToS because I'm on mastodon specifically for privacy and anonymity.