Well, it's a story of putting all the eggs in one basket, with upsides and downsides.
The downside is that it's one-stop-shopping for information. The upside is that it can be a single, professionally managed, legally accountable operator.
In Fediverse there's no way to know what those servers involved are doing with the information. You definitely can't hold 20K instances to any particular legal standard.
So it's a mixed bag, a wild west, for better or worse.