Google killed XMPP by being the vast majority of the network and then defederating from the rest. Most of the gmail users didn’t even notice anything had happened.

I see a couple of differences here. One is that it should be obvious to even the most casual of users that other instances exist. And the second is that other mega-corps have said they’ll build instances too. With multiple very large instances, they may end up holding each other hostage, for fear of losing users to each other when so many people have multiple logins just because they have an account with one of the mega-corps.

One thing is for sure. Insta has 1.6bn users and it doesn’t need to federate with anyone at all; the fediverse is a rounding error to them. Some people will want the massiveness of the network, others will want better moderation than the mega-corps are likely to offer, and some will prefer smaller networks anyway. There will be as many reactions as there are instances to react. And that will have to be fine.