It did when it was still called Calckey, but around the time of the rebranding their main server got into issues (Kainoa, the previous maintainer, was messing around with it to improve performance but that just broke things).
Did the Misskey network not advise against e.g. EU people signing up because of legal reasons like GPDR?
Anyway, Iceshrimp works very much as intended and has active development so that could be an alternative for some people (have no experience with Sharkey).
AFAIK lemmy.ml is the only instance that still has the filter on. When federation was not enabled yet and there practically were only two (!) instances up and running, people on Lemmy were already pointing out that things like posted by OP would happen. 😆
Edit: I think however, that this case was mostly in jest and on purpose.
For Pete's sake that is not what Dremor is stating.