I can understand part of the motivation for doing this, but does this not immediately make it significantly harder for users to evaluate an instance and make decisions about whether or not to join an instance based on what other instances it allows/blocks?

If I’m understanding this change correctly, it would hinder user’s ability to find an instance that’s well-aligned to them because those will no longer be able to see one of the most important metrics governing how an instance chooses to operate (what it federates and defederates with).