If those in power decide to push forward by increasing the penalties, eventually running a Mastodon server will become as risky as getting caught for murder. At that point, it would be naive to run a Mastodon server locally, wouldn't it?
P.S. Mind you, the average consumer/user doesn't care as long as Facebook, Twitter, Instagram, and TikTok are up and running. Quotes like "they already know everything" and "do you have something to hide from the government?" will become ubiquitous in public discourse.