Don't get me wrong - I think it is a good start, but there are some significant concerns:
My biggest UX complaint is that the method for connecting to a federated community is just....wrong. Do something completely unintuitive (paste a glyph / URL in search), get an error (not found), wait a while and hopefully it will start working. I can't fathom who thought this was a good idea, and I'm shocked that apparently Mastadon does it the same way. We're losing a lot of interested users at this step.
UX issue #2 - which may be fixed in .8, can't say - is that there is basically no error handling. Any server error or user error results in the spinning wheel of death. Sometimes refreshing fixes it, sometimes it doesn't. For example, did you know there is a 10k post limit? If your post exceeds 10k - you guessed it - spinning wheel of death. Try to sign up with a user ID that's already taken? Spinning wheel of death. Log in without verifying your e-mail? Spinning wheel of death. You get the idea.
I'm not an admin, but apparently that the software isn't really designed for cluster scaling. I think the assumption is that more instances solve scaling. It doesn't.
Functionality wise, there is very little control for mods. Pin, delete, ban. Edit the sidebar. That's it.
These are problems that can be solved, but the next step will be to see where development leadership steers the platform. It is how these problems are solved that will decide whether Lemmy or Kbin becomes the leading platform.