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We need a new Explore-Feed (similar to Mastodon), which consolidates the All- and Local-Feed
(lemmy.world)
The All-Feed is very important to increase the content-quality of the threadiverse and therefore, ensure its existense. However, for smaller instances, there is only limited reason to put the All-Feed prominent in their UI, because their posts will never be present there. However, if they push people toward their the Local-Feed (which they currently do), people will only stay on their instance and overall discussion quality declines.
So, to truly overcome instance protectionism, we need a new feed, in which an instance can find a good balance between showing content from other instances and its own.
Honestly, the problem with discovery is not that there are not enough posts in a single timeline. Merging local and global feeds makes discoverability worse on Lemmy and kbin, not better, because the timelines display posts, while the space is organized by communities. This means that smaller or niche communities just drown seas of posts from large or highly active ones.
If you want a real "exploration" timeline, you need one that limits the number of posts from any given community. And that still seems like it's well served by local/global splits, because the website you join should be meaningful.
We do not need, nor should we want, a network of "dumb terminal" Fediverse sites. We should be aiming for the local stream to be the big selling point for any given instance, with the ability to interact with remote communities being a value-add. A merged timeline kills local identity, and tells users that their hosting website is a 2nd class citizen in the Fediverse.
That should be given by the sorting-algo you chose. Merging local and all is additional to that so that you don't have to skip back and forth all the time.