It's not about having the necessary version. The feature has to be cookie driven, right? Otherwise, mastodon.social wouldn't be able to remember that an unauthenticated visitor has an account elsewhere. Such a cookie almost certainly won't be available across servers (thanks, ad trackers for ruining it for everyone). That means a user would have to fill in that form for every single remote instance they visit.
Think of it this way: suppose a user visits a tiny Mastodon server at social.example.com. They click a user's follow button. How will social.example.com know to redirect the user to the home instance they configured when they visited mastodon.social?
> If I’ve downloaded the Mastodon app without having a server in mind what is the app supposed to do, just list them all?
If someone clicks the "pick another server" option, they're taken to a perfectly serviceable chooser. That should have been the default. It works for all the other apps that don't default to mastodon.social.
It looks like you're correct; I went looking and found that https://universeodon.com had the new feature as well, and I had to type in my home server URL again. I actually thought this was a great solution before I realized you'd have to do it for every server; hopefully they find a better solution for this.
With the feature the way it is today, it makes it a little easier to follow users on mastodon.social, and a little harder to follow users anywhere else. Suppose that hypothetical social.example.com instance has 1 user. If that feature's enabled on the server, anyone wanting to follow that 1 person has to complete that extra step with zero benefit. It's only useful for larger instances, benefitting the few centralized servers without helping the federation as a whole.