Thanks for your answer. It's making sense to me. I do think this kind of thing might encourage more users to congregate on the large instances, but who knows, maybe it wouldn't be that bad if we continue making a new large instance if one fills up. Like how we have lemmy.ml, and now filling lemmy.world, and lemmy.world has a good experience.
I also am not entirely sure too how exactly the posts get populated, because I'm visiting some communities I added on that smaller server only a day ago, but it does show some posts from 7- 9 days ago (they don't have any new comments or anything), so yeah maybe I also don't completely understand how it works still. I added this one to the server I'm on - lemmy.studio - and I think I only added it today, but it's showing some from a few days ago: https://lemmy.studio/c/kbinMeta@kbin.social/data_type/Post/sort/Active/page/1