I think a thing to note is that their community was here and well established well before rexxit. Rexxit put a lot of stress on many instances and their moderation ability, so it makes perfect sense that they might prioritize protecting their established community from abuse over being connected to every instance that intends to be a reddit alternative. There are plenty of instances they remain federated to that share their more careful moderation.
I expect that some time in the future they may reconnect with some more popular instances, as rexxit slows down and modding tools improve.
The nice thing about federation is you can choose to join more or less connected instances depending on what type of moderation you are looking for.