Federation means centralized decentralisation. It aims to strike a balance.

Each community still needs to have an admin, a creator, and moderators. In the future, it will likely become possible for a community to pack up and move between instances, but things still have to have a "source". This is what enables centralised control, moderation, within a decentralised system. The "home" instance is in control of any given community, but it is in fact hosted on ALL servers that it is federated with.

But this isn't peer to peer, each copy is just a copy, only the "real" community gets to be a "legit original", this is how it can delete stuff. This is how you can delete your own stuff. Or edit it, for that matter. Every community has a "center" somewhere on the network, and all others are "spokes" to that "hub". But each server can be both the hubs and spokes for different things, spreading out the load on the system, and providing redundancy. When a server goes offline, the other "spokes" of any communities on it keep working to a limited extent, however, the "spokes" can no longer talk to each other without the "hub" so comments and posts stop syncing.

If any given server goes to shit, yes, there will be loss, but the system as a whole survives. And it wont be long before the communities that were lost set up new "hubs". Additionally, the old spokes don't go anywhere, they will still show up in search, be visible in your user history, available in full as an archive. It just wont be an interactive one.

Without this, you just get peer to peer, along with all it's suitabilities for illegal activity. In a federation, there's still someone in control, who can purge criminal or simply unwelcome users. Or to just keep things on topic, to prevent a star trek community from being flooded with bots posting star wars.