Can a admin delete every community and its posts from an instance on its end? For example, if a instance that was federated to your instance goes offline forever and is not going back online, can the admin delete all communities and posts from that instance that is federated to your instance?
Yes, they can.
Yes, there’s a “purge community” link that wipes it completely.
And even if there wasn’t they have full database access so they can wipe whatever they want (given the technical knowledge required). It is also not possible to prevent that, no matter what Lemmy developers implement.
It’s similar to any site, even those with E2EE, any site owner can get into their storage and delete whatever they want. E2EE only makes them not know what they’re deleting.