I would say the benefits are control of downtime. Hosting your own instance makes you responsible for your maintenance. If you maintain your own and federate with other instances, you still have an experience if another instance goes down, you just wont see that particular content. If you use someone elses instance as your “home” instance and it goes down, your account goes down with it.

The only points of potential issues with self hosting are if the activitypub protocol itself goes down, or something to do with your own instance such as going down itself or becoming defederated.