Are you saying that these large instances would refuse to interoperate with each other? There are already signs of that happening even among small instances, but people are able to move their accounts from instances that are blocked by (or block) too many of their friend's instances, onto instances that have moderation policies they are more comfortable with.
Better yet, because all account actions are covered by an open API, it would be possible to create an account on a service that lets you make posts on multiple sub-accounts on different instances, and aggregate messages from your friends across them, which should heal any fracturing of the network for people who really have friends who (are in communities which) hate each other.