There’s no monetary profit, but I could absolutely see competition for whose ideas gain the most support.
Capitalism is not “competition,” it is a specific mode of production. Competition exists outside Capitalism.
And the Fediverse does not collectively own all the instances. Each instance is created and supported by an individual or small group of individuals.
The source code is open and free, ergo people can do what they want. The underlying tools are accessible to anyone, the instances are not “production” nor do they exist for exchange.
You can even see the failures of unregulated capitslism in how lemmy (especially lemmy.ml and lemmy.world) are consolidating users and engagement. Unregulated capitalism trends towards monopoly.