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 I would not use a client that mutes certain replies because OP has them muted. You own your post, not the discourse that flows from it. The idea seems to stem from wanting to control other peoples' experience?
Of course people who would like to have their experience controlled can look for a client to do that for them. 
 the nice part is you can obviously use whatever client you’d like…

what if someone enters a thread cuz they follow you, but there are 1000 notes of discourse flowing through that thread? should they all be shown in-order? what if I’m following some of the repliers and viewing the discourse… might their replies be prioritized in my view? Should any other signals like zaps be used to prioritize which ones a consumer sees?

I just think our simple answers work well while nostr is subscale. But these questions of structural philosophy become more important over time. 
 Those are good considerations when designing an algorithm. Algorithms should not necessarily run purely on the client, as it could end up downloading a lot of notes that don't get seen. There has been discussion of algorithm-providing DVM's. 
 Yeah, I played with the DVMs on Amethyst and I think it’s a nice sneak peek at the future.

I just learned about this website recently which explores the ideas a bit:

https://noogle.lol/discover 
 Exactly, most Nostr apps are open source, and there will always be apps which ignore mutes and content labels. Even if all the app developers decided to honor the mutes on threads, it would be easy enough to make an app that didn’t. 

And if relays enforce these rules, then you just run your own relay with different rules.  
 It sounds like you are calling for censorship enforced by relays. And your answer to that censorship is "run your own relay." Why does that sound like recreating what we are trying get away from? 
 Well at this point we’re just talking about what clients are doing. But conceivably this could be applied to relays as well. 

I run a relay, relay.nos.social, and a few others, but that’s the main one. I publish both to my relay, and to a proxy that does a blaster to a bunch of public relays that accept writes. 

I could write some extensions for my relay which did this filtering based on mutes and reports, which I’d run on my relay. If you wanted the filters, use my relay. If you don’t like how I run my relay, use any one of the thousand relays.

@fiatjaf runs a relay which filters ‘censors’ content so you only get back content from people in the same physical country as you. If you make a request to the relay from Japan, then they’re censoring all non-japanese content. This is good because then you can publish and read content that’s legal in Japan, and you don’t need to care about other countries laws. 

Conceptually there’s no difference from the ‘censoring’ what will show up to each user based on geography vs what’s on a user’s mute list.  
 I do want to see localized nostr, but I don't know what is the right way to implement it. NFC check-in would be a way for local businesses to extend coupons, menus, or what-not to customers via nostr.
Speaking of which I don't think using peoples' IP is a legitimate way to determine location because 1. It's not voluntary, and 2. It's not always accurate like if they're on VPN. Maybe it could be communicated opt-in and natively via nostr 
 Yeah, you should totally build that using NFC’s or other ways to constrain location of what content is served to which clients.  
 It's just an experiment. 
 Yeah we need lots of experiments. By definition not all of them will work or be a good idea.  
 bad ideas can be fun.
like posting this note.