Wouldn't that just lead to situations where the mega instance could control the contents/users?
No, it would not, I and others in this thread keep telling you that. There's no need for users to have an account on that "mega instance" in order to interact with the community there, and if that community or instance goes sour it's no effort at all for the users to switch to interacting with a different community on a different instance.
It just feels like either I'm missing something
Yes, I think so. It feels like the same things are being said back and forth repeatedly, so we're probably talking past each other.
You may have an idiosyncratic definition of "decentralization", perhaps. There are multiple ways of decentralizing stuff. In the case of the Fediverse, you still have communities "centralized" in that their content is located on a particular instance, but the users can interact with that community from any instance. This is hugely different from Reddit, which has only one instance that's completely and forever under their control, where users can never interact with anything outside of it.
Migrating a user to a new instance is hard, yes, but you don't have to.
If a single instance has total control over the content and users (not the user accounts, just the fact that a huge number of users would be following that specific instance), then how is it decentralized?
How does an instance have "total control" over users from other instances? It has no control at all. At worst it can defederate, which would just hurry along their migration to a new community that's on some other instance.