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I'm still trying to understand all this. I thought all instances "see" (federate) each other. If they can defederate (block) others from seeing an instance, isn't that going to make discovery a problem? Wouldn't that also mean I need to create a new account just to see that instance?
Defederating only affects your instance and the other one, so it only affects users on your instance and on the other one (who cannot see content on your own). To get around it requires another account on an instance that has not defederated.
Even aside from differences in opinions, there are very valid reasons for defederating. Some places do not control spam bots, for example.
Most instances default to federating with any instance they find out about, but there is also the ability to make this a whitelist instead and only federate with specific servers.
For most instances the default stance is to federate everything, and defederate as last resort. Defederatipon isn't used just because you disagree with someone's taste in memes. It's used to isolate servers that are doing something you consider unhealthy for your community. A common example is unmoderated hate speech. It's better to defederate the problem server than to expose your own users and risk an exodus. And then if/when the instance fixes the problem that caused the defederation, you can refederate them.
Sorta, but as long as they default to federate everything you could always view it from another instance, or even start a new one yourself (inconvenient but doable).