You’re missing the point. Just like most people have no idea how their post office functions, really. And most people have no idea how their email service functions except at the most basic level, they understand enough to use it. For most nontechnical people I know, they’re more likely to be using yahoo or aol vs gmail.
You are missing MY point. If you put front and center how your social media is "federated" and then add friction in the signup process by asking them to "pick a server" then it's DOA for anyone except most tech users
From what I've seen, they've significantly changed their signup process to push unauthenticated users to a default feed and to create an account by default on their largest instance which is a massive win for getting new accounts. This is a good change