The argument came down to "call people what they want to be called" vs. "don't call people what they don't want to be called". The banned moderator preferred the latter. Either seems perfectly fine to me but I don't belong to any of the impacted minorities myself.

Firing someone, even from a volunteer position, over that specific argument seems like a severe overreaction. Assuming we got the whole story, of course.

Internet drama. Tempest in a teapot.