Now, the second level is the actual server (also called instance). There is no central Kbin or Lemmy server (although the instances that are run by the developers tend to basically become that). Instead there are a lot of servers (e.g beehaw, feddit.de, lemmy.world) that run either Lemmy or Kbin. These servers can interact with each other, because their software can, this is called federation.
This brings us to the third level, the users, you and me. I have an account on Kbin.social, because thats where i went to sign up. Kbin.social runs Kbin, so I use Kbin. Same for you. Bread2390 has a sh.itjust.works account, which runs Lemmy, as far as i know. So they are on a different server (instance) with a different software (lemmy) but we can interact just fine because of federation.
Now, all of this sounds complicated and kinda is, but in your interaction you didnt even notice that they are on a different server running different software. But if kbin.social went down, or tge software kbin would somehow turn to shit, bread2390's account would keep working just fine.
I hope this helped!