Hosting your own doesn't really matter if it just means you're on a social network with one user.

Nothing, fedi is extremely anarchic by design. If you don't like a server you can move to a different one, or start your own. The big Mastodon servers put in a great deal of effort to police what their users can see and interact with (see FediBlock), but it's impossible to shut certain people or groups out of the network entirely. It's a double-edged sword, but it's a net good for the kind of network it was intended to be, which is a hacker's network; it wasn't designed for normies.

Maybe they're referring to defederation? It's quite common on Mastodon as I understand it, due to disagreements on things like moderation between server operators.

What does it even mean, period? MAGA losers are free to establish a community on Bluesky, the only difference between that and Twitter is that Bluesky isn't built to optimize for ragebait and culture war fighting. But they can still socialize among themselves on Bluesky even if no one else wants anything to do with them.