I used to volunteer moderate a very busy forum.

Our rule was that anyone who wanted to moderate “too much” was effectively not allowed to do so.

The catch being finding those who would help out and moderate effectively was not easy. And even then you were cycling through them regularly as inevitably if they cared enough they also cared enough that they stepped down.

I do wonder though if you have people doing it for the money, would that help or hinder?

One fairly busy forum I cofounded and "moderated" on, we intentionally call the moderators "Janitors" in an attempt to dissuade the sort of people who wanted "a powerful role" from even wanting to ask. It sorta mostly worked, largely because there were 7 very like minded cofounders of that forum who stared it as an escape route when a previous version was sold to a forum-monetising company (Vertical Scope, from memory).

“Moderator” used to sound like a boring role as well once upon a time.

You can probavly get better, more accountable moderators, if it meant losing your job for violating the rules.

Money could also be invested in developers to maintain Mastadon and issue security fixes.

You don't seem to know how Mastodon works. If moderators aren't self-consistent in their judgement, users can literally take their profile to an entirely different website with no service disruption at all.