The potential for division in the fediverse as a whole is worse. On twitter, there were McCarthyesque, opaquely curated user blacklists to worry about. A conglomerated instance could enforce this kind of arbitrary censorship across entire communities by imposing rules on who their federation partners can federate with, and control network disruption by refusing to federate with new, <100 user instances under the excuse of "preventing spam". Centralized social networks have already isolated people into information bubbles bad enough as it is.