Aren’t you just cutting down on the amount of content you can see?
Plus, you reduce the amount of content they can see (while logged in). Quoting myself from a similar context (It is about a community on another instance, which is federated with Threads, while your home instance defederated from Threads):
You wont see posts or comments from Threads users in that remote community. You also won’t see reactions to those activities from anyone, anywhere. It’s as if comment chains started by Threads users don’t exist.
Threads will not see posts and comments from you, even if done in communities from instances which are federated with Threads.
There are also more subtle implications. For example, some might find the situation in remote communities which have both federated and defederated qualities confusing (Imagine “see this comment section” when different users see different versions). This might be a reason to avoid these communities, to only visit communities on other instances, which follow your personal policy of de/federating Threads.
The same is probably true for votes. If your instance defederates Threads, you don’t see their votes, and they don’t see yours.
Defederation in this context sends a political signal, which some people find important.
This was not meant as a comprehensive answer, but as counter-examples to your core question (“Aren’t you just …”).
As a user I’d personally prefer to pick and choose what I can see.
You can do that either way, as explained in my previous comment. No matter on which side of the argument you are, use an account on an instance which has a similar policy. You can have many, you can use many. Of course, most people want to use not more than one, which is why they try to make sure their instance’s policy reflects their personal preference, instead of making sure their instance choice reflects their personal preference. In reality, we see both (people influencing their instance, and people choosing their instance), and both is fine.
Further, we need instances which defederate from Threads, so people can choose this option.
I’m new to all this so maybe I’m missing a crucial bit of information.
I get you. I’m also missing a comprehensive, compact list of consequences.