Almost but not entirely I think, when reading the documentation I discovered a tidbit about how federation works, you can set up an instance to work with either: open to all, block list (open to all except those blocked) or allow list (meaning you block all and allow only those on the list).

So your new instance would be able to federate with the first two, but it wouldn‘t with instances who work with allow list. I‘m not yet aware of those, but if it‘s an option it probably exists.

Please anyone correct me if I am wrong, still trying to wrap my head around this!