You only need to choose an instance if you want to upload. If you bump an instances limits. Roll your own on a cloud service like akami-linode and then you set your own limits.

Basically peer tube is like a bit torrent instance with a bit of local storage provided by the server operator that is oriented towards streaming. What you upload is what you get. There is no re-encoding or recompression or resizing. Unless you do it yourself. If you try to watch a version with a much higher bit rate than your connection can sustain there will be lots of buffering. But you can absolutely still watch.