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The decentralized web is growing
(jlai.lu)
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this post was submitted on 18 Jul 2023
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They could, but they're pretty much guaranteed to not be as bad as the big corporations because they lack the resources and know how. The fact that you could also host your own instance is a huge plus considering that you could basically ensure that your data won't get collected.
Even if you're self-hosting, you still have to send your data to any instance hosting posts or comments you're interacting with, otherwise you'll be the only person to ever see your own posts and comments.
No other instance will be guaranteed to have a complete profile of you, though.