They probably could but if they do so without cause, then likely they will lose users and have others defederate from them, too.

I think when it's easier to migrate accounts between instances, were more likely to see more movement. I had an account on Lemmy.workd and this one. I was hesitant to abandon the world one as I'd already curated blocks and subscribes. It felt like starting over, doing so again elsewhere.

There are now tools to automate but it's not as simple as it should and likely will be and those tools aren't baked in.

I imagine that if that instance is flooded with new users and continues to grow, niche communities may become even more attractive as irrelevant content overpowers what many users want to see. It's also good that new users have a place like that to easily find content, even if it's broader than what will make for a long term community with adult discussion. Both kinds are good.

The only reason I picked Lemmy world is it was one of the listed communities on the Lemmy instance list. It listed by user numbers, so it's likely to stay there, if that website continues to be just a list of instances. The advice is to pick an instance that matches your interests, but few instances are purpose built for that. I'd want to trial Lemmy as a new user before doing that level of research.