They are deeply threatened by it and are desperate to capitalize off xitters failing. Mark is probably enraged that he can’t just buy up the company and snuff it out.

I think it’s inevitable that if they aren’t going to use a blocklist (which they are probably too stupid to consider doing) they will likely end up in legal hot water for having the site become a war zone of alt-fedi instances harassing celebrities and random people off threads. I do not see how them federating will go well, at all.