If you're banned from a popular instance you're not banned from the platform as a whole. Because there is no single authority dictating where you can and cannot post, unlike Reddit. It's similar to being specifically banned from a subreddit.
Reddit is a kingdom whose king delegates power to various fiefdoms, but ultimately still controls the land. You are at their whims, as evident by the fact that they're removing mods that disagree with their API policy. Federated instances are multiple kingdoms that share borders which they keep open for the sake of trade. But those borders can close depending on how their neighbors interact.
It's like I said, a return to forums or IRC style governing except the authority is the forum or channel itself, and they can link to other forums/channels as they want in a seamless fashion. In order for systems like these to work communities need a way to defederate and control who they connect to, because inevitably bad instances will rise whose sole purpose is spam, harassment etc.
