The admins to perform upgrades, monitoring, fixes, etc… will require root access to the database. That means they can alter all your posts to say *blah blah blah" if they wanted.
Similarly passwords will be encrypted within the database and encryption algorithms have to be able to go in both directions. Normally they need a seed value to start random generation. The admin defines the seed as a result an admin can decrypt everything in the database.
If you signup to social media it will pester you for your email contacts, location and hobbies/interests.
Building a signup wizard to use that information to select a instance would seemto be the best approach.
The contacts would let you know what instance most of your friends are located (e.g. look up email addresses).
Topic specific instance, can provide a hobby/interests selection section.
Lastly the location would let you choose a country specific general instance.
It would help push decentralisation but instead of providing choice your asking questions the user is used to being asked.