The user should not need to request all other instances to delete their data, their account is with a single server. It’s on the server admin to ensure that all exchanged data is taken care of appropriately.
If your European server shares data with an American server, that European server has A Problem. There’s a good chance lemmy.world federation with fedia.io may already be a violation. The issue isn’t as black and white of course, but the entire situation is legally dubious to say the least.
You’re right that the Fediverse isn’t like Facebook or Google where there’s one company in control. However, the downside of that is that there are millions of tiny instances, all with legal responsibilities. There are implications about privacy law, but also porn laws, propaganda laws, hate speech laws, child porn laws, and intellectual property laws.
We’re all just kind of betting on nobody ever taking any legal action here. One lawsuit can wipe out the Fediverse as we know it.