I don't really know how Mastodon works, but one thing I've wondered is, how does is a small instance affected by federating with a large instance? If, for example, some instance were to grow to a significant percentage of Twitter in terms of usage, does that spill over into servers that are federated with it? Or do instances only pull data by request so that it's own userbase size is the main determiner of load?
ActivityPub has the notion of a "shared inbox", so if N different accounts on alpha.example follow an account on beta.example then beta.example only has to send a single copy of a post made by that account to alpha.example rather than N copies of the same post.
Federating with other instances isn't binary: instances subscribe to individual users.