No idea - but I actually think the Fediverse concept maps to Reddit way better than it has other social networks so I could see some iteration of this really catching on over time.
For something like Twitter, the whole value proposition is “one big universal conversation” and the federated stuff gets in the way of that a little bit, but Reddit has always been a federation of communities (who occasionally fight, join together, cross post, etc) - that maps really well to this stuff.
That’s what they’re saying.
Essentially - if someone from the small instance subscribes to a community that has a ton of data (huge post volume, images, whatever), the small instance needs to pull data over from the larger instance. At some point there may be communities that are so large small instances can’t pull them in without tanking.