Not an expert, just relaying what I read elsewhere. TLDR: "nothing goes in, nothing goes out between you two" is about right, but it's not entirely symmetrical.

Instance A defederates from instance B. This means that (let instance C be a neutral third party that is federated with both A and B):

• no posts or comments by users from B anywhere on lemmy are visible to users from A
• existing posts and comments in communities on A are still visible to users from B
• new posts and comments by users from A and C in communities on A are not visible to users from B
• new comments by users from B to existing posts in communities on A are not visible to users from C
• new and existing posts and comments by users from A in communities on C are still visible to users from B