When I praise other mass murderers, and advocate for other hateful ideologies, why does that not provoke the same reaction?

It does provoke the same reaction in me. There are many violent movements and ideologies, and if you just publicly praise those (or other horrific leaders) on a game server, well I don't know if I could understand that in any other way than trolling.
But again, that's a blurred line and anyone can take the incentive when he/she deems it necessary.

Another factor why on some issues there is no proper reaction to trolls might be "unintended" ignorance. Not every master knows every ideology or their figurehead (and therefore, cannot judge appropriately), so it may seem like there is a double standard when in reality there is none.

I'm well aware of the story a-monster is referring to.
If you're making shit up and try to convince people, in a very detailed fashion that is, that a person has commited a crime (which didn't happen), this is at least defamatory if not outright libel, and in my mind this has no place on the server.
Now you could argue that it's just an online game with nicknames and such, but a player's reputation can be ruined through constant silly trolling like this, which is why I say that a ban is appropriate here.

Other than that, on the topic of chat on the server, I'm pretty laid back:

Here are my thoughts on the points @Sweeper brought up:

Are people that write religious bullshit, leftist propaganda, or crude conspiracy theories, better than a nazi troll?
What about endless conversations between certain people?

I think there's a blurred line somewhere between the normal range of ideas & opinions and trolling. This means we shouldn't try to draw a red line here, because it would be too difficult to do so.

Every master can act on their discretion here, although I would prefer it if the Sauer chat is just left the Sauer chat. Just because you have access to #mute but disagree on substance, doesn't mean you should mute. Let em talk. Don't like a spammy console? You can use /ignore <cn> too.
People write religious bullshit, leftist propaganda, or crude conspiracy theories?
You're free to disagree with them! Don't want to discuss? /ignore <cn>.
If the conversation does not turn excessively vulgar, let em talk.

When should somebody be muted or banned?

I mute in three cases: Spamming (a full console is not spam in my mind), other people asking for a person to be muted, and yeah, nazi shit/libel/persistent trolling whatever you want to call it.
Muting should suffice in all cases, and I never ban anyone for speech.
Repeated, lying offenders like the person described above deserve a kick though. Or two.