My Federation status set to "On." What does this mean exactly? Are there Lemmy communities that I am automatically federated with when it is enabled?

SandwichStan@kbin.social to /kbin meta@kbin.social – 2 points –

Under status, it says

Instances:

What does this mean exactly?

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What "closely" federated instances? It is blank under "Instances:"

The instances are currently not listed, but you can see them when you view /m/all or /m/newest. It will be updated in the future.