While you are correct, the reasons for Beehaw defederating from lemmy seems to be something they have to do in order to moderate their own instance. As the technology grows (and hopefully modtools get built - like bots perhaps? and more mods in general), there will be no need to deferederate like Beehaw did. However, to give you an example as to why an instance would want to defederate (essentially, be private), is if it’s for an exclusive group of people. A workplace, or a subscription add-on. (think like, subscribing to a patreon, and as part of their offering, you get to sign up for their lemmy (or whatever server) instance). Maybe that isn’t how it would work, but in my brain, that’s a way it could be used and be beneficial :)

Is it true that wefwef can read your password?