Yea, i find it quite baffling that people think the Federation means "the good guys" while the Empire means "the bad guys"
None of them are the good guys, but the Empire is the lesser of the two evils - and by quite some margin.
This got discussed a while back somewhere else... very short version is that nobody necessarily needs to say who is good and who is bad; if you don't read any lore whatsoever, and base your opinions purely on, well, tropes and assumptions, Feds=good, empire=bad.
Pop culture generally portrays "The Federation" as good guys, and Imperials/ Empires as bad. For example, taking two of the biggest influences of sci fi culture Star Trek's 'good guys' are the Federation[1], while Star Wars portrays "the Empire" as bad.
In stellaris, Federations are usually the remit of more egalitarian, xenophilic races, while individual "empires" are usually the remit of xenophobic, militant conquerors. This is a nomenclature that usually extends to other titles.
And then, to just scratch the surface of lore, you have Federation, a dystopian capitalist society, versus Empire, a class based society built off "Imperial Slavery". Most can't get past the term Slavery to question what it actually means in the context of the game (but let's not ignite that one again), and class based societies are (strangely[2]) unfamiliar to people.
But capitalism, everyone knows what that is and so it's relatable... and dystopian? Cool, so like fallout or cyberpunk right? That as a theme is vogue right now, you just have to cast your eyes over netflix to see how recycled the whole "Genre X, but with a dark, dystopian twist" is... because it's popular.
So, yeah i don't think anyone needs to say who is good and who is bad, subconsciously it's implicit (even if it's wrong).
Either way, I'll happily lap up the tears of Federal supporters who think bad things are uncharacteristic of the Federation.
[1] Even though the portrayal of the Federation outside the crew is, often, negative. That's kinda tropey though... you can't really make an episode out of the Federation simply doing good things for once.
[2] i guess what i mean here is an explicitly class based society. Most western societies at least are implicitly class based... so it still feels unfamiliar.