That link says that the criteria for all trust levels can be altered. Is there any chance the admin could essentially set the requirements for TL2 or higher so high to avoid any of the potential problems with users getting moderator-style privileges? Or even set them to not work at all?
If so, that could be what they meant by saying that community moderation would be turned off.
Community Moderation only happens when posts are flagged (reported). If enough people flag a post, it gets hidden. How many is enough? That depends on the trust levels of all involved. A single flag from a TL3 can immediately hide a post by a TL0, for instance. Or you might need 5 TL2s to flag a post made by another TL2 before it’s hidden.
Hopefully, they’ve turned that completely off (if it can be turned completely off).