In theory, absolutely. In practice, I've heard of major instances using their power to dictate "If you federate with $out-group, we won't federate with you". Most admins want to federate with other major (mostly good, popular) federations, so they capitulate.

As such, being kicked from one instance leads you to sign up elsewhere, until a major instance notices and tells your new server admin to kick you out. When you create your own instance, the major instances use their soft power to ensure almost nobody else federates with you.