Users should have the freedom to hide content that upsets them, regardless of the context.
Giving users the ability to curate their own worlds tab to hide offensive content places the responsibility and the tools necessary to make choices that can only be made on an individual case-by-case basis in the hands of the individual.
Implementation:
Add a "Block World" button in the list of options when looking at a world on the page that shows instances on the right.
Add a "Blocked Worlds" tab similar to the "Blocked Users" tab.
Hide the location of any user on Blue or Green who is in a world you've blocked.
Warn users when they are about to accept an invite or join an instance in a world they have blocked.
Spoken Language / Live Play Example:
"So how would it work if you block a world and you want to join someone who is using that world you blocked, you won't be able to join them or how would this solution work exactly?"
Your friend, who is on green or blue, will have their location hidden. If you receive or request an invite from that user, you will see the world name appear as normal/part of the invite. When you hit the checkmark to accept the invite, an additional pop-up will appear. "You are about to join a world you have blocked. Are you sure you want to join?"