Automatically creating a shadow account for everyone on Instagram?
Even allowing people to follow that account?
Sounds like they really wanted to push Threads out the door in a big way.
Sadly, it was destined to fail. In Diaspora and in Google+.
The thing is, while people definitely do have different circles, they don't like to think about these circles in an explicit way.
Facebook has had something like this for a while now, you can set visibility settings on every post, but again almost nobody uses it.