Each instance would ideally have their own standards for neutrality or bias that they see fit. It's no different from self-hosted wikis except with the federation concept appllied on top of it. I'm sure someone will create an instance that is a straight up clone of wikipedia, another person will create an instance for everything pro-communism / pro-china, someone will create a strictly anti-theism wikipedia, etc.

I don't see anything wrong or weird about this, the skepticism this project is receiving is stupid. It's nothing new under the sun.