I don't use any Facebook products for a reason, and I would not want to have to move to a different instance if the one I chose would federate with Meta. And the same goes for other data-hoarding companies out there, in case they try to enter this space.

Exactly, and that's why the response has been so negative. Every instance that federates with another stores a complete copy of the posts and comments from every federated user.

If the majority of instances do not defederate from a Meta instance, that Instance will inevitably become the primary destination for discussion, even between and by non Meta-Instance based users, just because the communities in that Instance will be so large and active. And even if they don't, Meta Instance will have a stored copy of every community whose Instance is federated.

Meta will then have carte blanche to collect data on a huge collection of users from outside their own Instance.

I acknowledge that they could get the same data by scraping the public Instances anyway, but still... Fuck all of that.