That's correct.

In terms of data handling, everything happens locally on instances. So if the instance doesn't have the data, it can't display the data. There's currently no mechanism in Lemmy to backfill communities and user profiles: it starts collecting data as other instances start pushing the data after a user subscribes. No subscription no data. Although I'm sure if an admin really wants to, they could make a script to go fetch and backfill a lot of that data.

The big problem is that's really resource intensive, you're potentially downloading GBs of data from another instance. So I can see how the devs don't want a new instance to bring down other instances with massive data transfers.

Thus, the authoritative view of a profile or community is on the home instance of those. It will never be complete on other instances unless that instance is subscribed to every community the user has been active in. But that's fine you can just go visit the remote instance to browse that data.

I think it's not bad. Users can be active on instances I don't care about or like, but from my perspective and my subscriptions, the user is well behaved. I don't need to know they got 5000 points posting to shitposting meme communities on some fringe instance. It's not relevant to me or my users. I'm fine going to lemmy.world to view a lemmy.world user profile. Or maybe they collected -5000 points from lemmygrad, but on !politics@lemmy.world they're well behaved and I don't need to be swayed by their negative points from another instance. I'd only care if I was participating on lemmygrad communities, and I would only see it if I'm subscribed to lemmygrad communities.