Code for people interested https://codeberg.org/rimu/pyfedi/src/branch/main/app/admin/routes.py#L373
I commented it out, rebuild the Docker containers and it works now 👍
EDIT: People seem to misunderstand what it does. It prevents it from federating automatically when populating the community search, importing from another instance or from Lemmyverse. It’s not a full block, and you can still add it manually. Not only that, but it’s also already partially removed since I posted this.
No, it’s incoming. When you first set up an instance you have to kickstart the federation process by adding communities to federate. The linked code excludes those specified communities from that. Once federated, they won’t be blocked AFAIK.