Defederating, at its most simple, means when you're browsing one instance (let's call them the defederat-or) content and conversation from the instance that they defederated from (the defederat-ee) can no longer appear on the defederat-or's instance. If someone from the defederate-ee comments on a post shared over in their instance, the users of each instance do not see each other.
None of this stops you from browsing the defederat-ee's instance either with a login on their instance or as a lurker. You have the ability to see and engage with that instance virtually as you see fit. While not everyone is like this, generally the people who understand this and are still mad about it are just free speech warriors who don't want to ever feel like anyone is ever telling them what to say.