Most likely they are just blocking all users who have an EU home country associated with their Instagram account. Meta determines an account home country based on a lot of different signals, and it takes weeks to months to update after actually moving. Just using a VPN is not enough to get it to update in a short amount of time.
Even as a Meta employee I remember it taking multiple months after moving from Europe to the US before I could use US-gated products (late 2020/early 2021).