Thank you!

TL;DR, the relay bit works as a completely connected network topology, and has the associated quadratic growth issues, which renders it, like you said, hard to host.

Also nasty: Direct messages are just not federated.

Other things are or were at the time of writing janky, but nothing else is quite that egregious. The author is working on a separate project, and recommends this idea as a solution for portable identity on ActivityPub; here's what "object capability" means in the context.