Generally we don't place restrictions on usernames because to restrict specific words can be counter-productive and easily circumvented.
If we ban the word "moderator" then it can be circumvented by writing "mơderator" or a thousand variations of such that is hard to spot or ban specifically.
It also isn't worthwhile to ban someone from using specific words because it is entirely possible that they are legitimately using the word, but not in the context of this site. It is possible that they could have the username "SiteName_Moderator_Bob" if they are trying to support users from their own site.
Essentially blocking the rare specific word abuse wont prevent someone who is actively trying to make use of the word and only harms those with a legitimate reason to do so, and is a painful and arduous process to implement and keep up to date.
It's a lot easier to just deal with the rare case of abuse than to maintain an entire massive dictionary or banned words and their various misspellings.