They say it doesn't matter whether you join a large or small #fediverse #mastodon instance, but it seems that searching for or follow a hashtag will only show posts by people on the same instance or those who are already followed by _someone_ on your instance. So it matters who your fellow instancemate follow – did I get that right?
It also means that following doesn't just affect what you see – it may also get the followee onto your server's radar.