I imagine most Moderators are, errmm, moderate.
That is, except in cases of out-right blatant SPAM, hopefully they give at least one "free pass" and are generous giving benefit of doubt.
Of course it's up to the site Admin(s) to say what is acceptable and what is not, and what should be the action taken in different situations.
IMHO if a Moderator is unable to agree with the Admin(s) vision they should step down. Likewise if a Moderator is having a "bad day" or has a "conflict of interest" (i.e. something that might bias their judgement) they should defer any final decision to others.
Not that this is always the case, But I would hope it is more often than not.
There are all kinds of things that might be "policy violations". Fluffy posts, argumentative behavior, member bashing, flaming, trolling, fake signatures, self-promotion, cross-posting, making off-topic posts, NSFW posts, etc. etc.
So for one example, say a member starts a topic "My new web site" that is nothing more than an advertisement with a keyword link-text link or three. But it is the first time the member did anything like this.
Maybe the member made the post while excited about their new site. Maybe they were unaware of the Policy,
The fair thing to do would be to contact the member, explain why the topic was unlisted, ask them to read the Policy and to please ask about anything they don't understand about it, Then remind them that they are valued as a member.
They behave from then on? Great! They do it again? Not so great, this time it probably counts as a "strike" against them. They do it again? It looks like they are intentionally disregarding policy.
What then happens depends on how the site has decided various Policy violations are to be handled.
Maybe their TL gets lowered and or locked for a while, maybe a short time-out Block to force a cooling off period, Maybe a temporary Suspension, Maybe a permanent Suspension. In any case, fore-warned is fair.