Maybe a little sticky, but decentralization doesn't discount that there are nodes, or points where things gather. In fact, decentralization, as I've always understood it (coming from anarchism background), is that there is no central node to which all others are beholden. Rather, there are centers (plural). So....

At the level of instances (plural), no one is central. The network is decentralized, containing multiple centers, all (most) of which are connected through federation (the word "affiliation" is not too far off either). And, while yes, any one instance could be considered a "center" and thus maybe considered to be centralized, it really isn't. Decentralization is less about a single specific object or node, and more about how said objects interact and relate.

Side note: I think when it comes to convos around decentralized networks, there really needs to be more investment in how they differ from distributed networks. In that difference is a ton of insight about how systems function, etc, imo. Personally, I'm much more interested in distributed networks.