tl;dr: If it is visible on Lemmy.World, then it is subject to the ToS
I get how this makes sense, but legally this seems clearly false. The end user is interacting purely with their own instance, its their instance that is pushing the content to LW servers. If we're putting on the big boy pants, we might want to make sure they're the right size. There probably needs to be actual legal consideration about all of this, with a particular look into the implications of federation.