In this case, I would argue MimicJar’s point (Edit: Shit, I didn’t notice who I’m talking to. Well, you make good points I guess, lmao), and say that even if we were to defederate with the large instance, we’re still no worse off than if we had never federated in the first place - in fact, we’d likely be better off, since any anti-nazi users in your scenario would know where to find us.
The way I look at it is like, if Reddit were part of the Fediverse, they would’ve dominated in much the same way as Threads intends to. But the moment they even started pulling sketchy tactics, we could’ve jumped to other instances.
I mean, that’s essentially what I did anyway, but with no clearly defined alternative, not everyone knows about the Fediverse, whereas they would’ve had that option if Reddit was federated. Plus, in theory, I’d still be able to view and interact with Reddit content from my instance, at least until they separate entirely - at which point (again) I would have the choice.
I personally believe that, given the choice, many people would decide to support smaller federated instances over corporate monoliths. Not most, but many.