Perhaps I'm wrong about how Matrix works, but my understanding was that at least public rooms still had a "primary" homeserver, like for example I can connect to #debian:matrix.org from any number of federated servers but matrix.org is still where that room "lives".

If that understanding is correct, then IMO the answer is simply that the canonical timeline is what that server says it is. Poorly connected users or those on other servers experiencing issues or delays with federation may temporarily see a different sequence of events but once everyone's had a chance to sync back up the state should generally be what the primary server for the room saw it as.

Perhaps there should be some sort of flag for "this message has been reordered during a resync" that clients which initially had a different state due to whatever reason could store to make it clear what happened, and likewise if the central homeserver receives messages with a timestamp significantly off real time it could flag those messages as possibly having been received out of order while still displaying them in the order they were received.