It only federates a community if a user on the other server subscribes to the community. So if you subscribe to a community on remoteinstance.com, then all posts and everything from that community will be federated over to your server, but no other communities will be, and posts on your server won't be automatically federated to them.
this post was submitted on 12 Jun 2023
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@Andreas Actually, it's none of the above, but if you wat it is more on the one-way side.
First important thing: Not whole instances federate (all their stuff) with each other, but just users/ groups/ communities/ magazines. All of these are "actors" and the https://activitypub.rocks/ protocol is designed about them exchanging information.
This exchange is mostly push-based along follow/ subscription relationships. This is what makes it mostly one-way.
Replies are delivered explicitly.
@Andreas Furthermore, fetching and pulling data back is also possible, but for scalability reasons only happens for minor specific cases.