One of the issues with only following people you see in your federated time line is that you aren't growing your instance's federation. There is possible growth if you are not in the other person's federation as you might end up being introduced to their instance.

The community needs to figure out a way to aid discovery outside of the federation.

@Selsky
Don't you just follow people in other instances to see their instance?

@PoliticalVoyeur Federation only shows people on your instance and people that are followed by people on your instance.

If you're on instance A and no one follows you on instance B then instance B won't see your toots. However as soon as someone follows you on instance B you will show up in the federated timeline for the whole instance.

This can lead to the situation (and frequently does) where your toots can be seen by people you can't see.