I've tried searching for other posts that ask a similar question, but I couldn't fine one that could fully make me understand what it would mean in this scenario.
So far from my understanding is that if I browse All, the instance I'm on won't show anything at all from the instances that it blocked. But manually doing the workaround would still show me the community and whatever posts that got federated in my instance. Is my understanding correct?
The other topic of federation that I'm interested to understand as a user are below.
The example: fedia.io states in their federation list that it does not federate with ani.social. But ani.social states they federate with fedia.io.
I can go to say !anime@ani.social just fine via fedia.io, although there is some posts that doesn't show. Is this one of the result of this situation?
Additionally, today I did basically try to subscribe to all the same communities/magazines on my lemmy.world (I'm considering to abandon this account), fedia.io and kbin.earth accounts.
Other than the situation above happened to some communities where some post doesn't sync, I've also found some communities that's just inaccessible from either 3 instances.
I highly recommend a smaller stable instance. You are less likely to end up between defederation wars.
Initially it will suck because you wont find communities and your feed will look empty since you need to have atleast one account from your instance subscribing to a community to federate it to your instance, but once you find communities and subscribe you'll have the widest access to content since federation is on by default and instances explicitly choose who they defederate (or they use lists of known bad-instances, but small ones are often not on these).
But that's just my opinion, look into options a bit!