Yup, I had the same question and was frustrated I was missing so many comments from instances that were federating. Just leave allowed blank and then block the bad ones unless your really concerned about bad instance actors.
current blocked from lemmy.ml:lostcheese.com,mandacaru.caatinga.digital,melonbread.dev,lemilat.ml,fc.monkee.ch,thu2.closed.social,a.t.roelroscamabbing.nl,kenstroller.fedi.bzh,lemmy.services.coupou.fr,lemmy.glasgow.social,lotide.fbxl.net,masr.social,community.hackliberty.org,legbeard.xyz,collapse.cat,lemmy.subtlefuge.com,b.tide.tk,bbs.9tail.net,remmy.dragonpsi.xyz,elgiebety.pl,lemmy.thebitpros.com,dev.karab.in,wiredentrypoint.xyz,federated.community,verity.fail,lemider.me,lemmygrad.com,exploding-heads.com,sportsfeed.me,delraymisfitsboard.com,dev.narwhal.city,lemmy.burger.rodeo,lemmy.juggler.jp,lemmy.mesh.party,c.tide.tk,narwhal.city,wolfballs.com,burggit.moe,lemmynsfw.com