I would be surprised if the UK government tried to read - and implement - the legislation in the broadest sense any time soon. If you have an instance and are below the 3m MAUs, you're likely fine.
Until you're not.
The moment a Mastodon instance is found to be hosting content the OSA is meant to protect minors from, that instance will be investigated and explored to the most liberal interpretation of the law, and that individual is going to find themselves either implementing age verification, shutting down that instance, or fighting their stance in court.
Risk, as ever, is about likelihood, not just impact. How likely are you to find yourself hosting such content? Could you self host just for you and people known to you? Your question implies you want to set up a centralised instance with lots of people you don't know, but that's the exact scenario Mastodon is meant to counter, it's meant to be federated. And if it's just you and your mates, what's the issue? If you want to give children access, you're into another World of problems, so maybe for your own sanity - and arguably, theirs - just don't do that.
