Yes, that will show you all the communities/magazines that your instance has already discovered and have started federating with. But if it is a community that hasn't been discovered by your instance yet, you will need to search with the link for it to start federating. And once even a single user from an instance does that, the community will be visible to everyone else as well.

On Lemmy, if nobody is subscribed to a community on your instance, it doesn't appear in that view.

In order for it to appear, someone with an account has to go to the search bar at the top right of the page and type in the URL to the community manually. Then it'll appear after an initial search.

On large instances like Lemmy.world, you can almost guarantee someone has already done this for most popular communities - but newer/smaller communities may not appear because nobody on your instance has searched for them yet.

For smaller instances, there are likely multiple communities missing and you'd have no idea until you went to look for them.

Just be careful. That only works because your instance already knows about those other instances because someone already interacted with them. If you ever want to join a community on a non-popular instance, you might have to be the first person to search for it by copying and pasting.

That's cause over time people have added communities to your instances repitoire over time. Network effect, essentially, making it easier for each new user. Tbh, if new users are on a bigger instance this should be a non issue.