I've tried to read through and understand all the comments. I have certainly failed in doing that, so bear with me if this has already been covered.
Can't we spin up an 'onboarding' instance? Where Local is focused on helping new people navigate and understand this stuff with focused communities to navigate Lemmy, understand Fediverse, Choose Instance, even communities run by adjacent fediverse participants like piefed, mastodon, peertube etc.
The instance could have a clear onboarding mission, with an expectation that as users become acclimatised they will move off to start trying a 'home' server. Their account could be activated only for a period of time on that server.
The delineation between Local, subsrcibed and All can be leveraged here to provide a safe harbour with active mods ready to guide, while allowing Lemmy Full Blast on All, so people understand the reality of Lemmy.
This would also provide an experience a lot like the experience i generally have with Lemmy, AZ is cool, sometimes a little sleepy but rarely any real issues or drama. When i'm up for it, i venture onto All, but its easy to deal with because i know i can just switch back to Local whenever i want. I imagine this is what its like for most users on medium to smaller instances.
I agree with the person yhat said subscribed isn't that useful, i've found that as well. Maybe thats poor subscriptions by myself to blame for that though.