By definition, ActivityPub is a protocol to add interoperability, in a social network way, to disconnected platforms. So, as long as they federate using AP, then it's fine. Consider the non-accessible content as "private".
There are #fediverse software with a "This instance/server only" feature. I think every fork of Mastodon software have that feature, only the mainline Mastodon doesn't have it. Other Fediverse software like Hubzilla, Friendica, the Misskey forks, the Pleroma forks, I think even Pixelfed, all have it.
Think of Threads content not viewable as "This instance only" type of post.
If it is wrong for Threads to do that, then one could argue that it is also wrong for other Fediverse software and forks to have an instance-only privacy feature.
For me, that's fine. As long as they federate. Maybe a third or two of their userbase will turn the feature on. That's good enough. 😉