On version 0.19 you can block instances so that you don’t see any posts from that instance, instead of having to block communities one by one, you still see comments from users of that instance in other posts so it isn’t completely blocking the instance.
Not necessary. Your instance still can just not federate with anyone.
Yes, and by not blocking Threads we let it to become a de-facto standard way to consume content on the Fediverse. If users want to avoid closed ecosystems, they can just create an acc on one of many mastodon or lemmy instances.
Blocking a single bad actor = being fully centralised. Again, create an account on the instances that don’t feed on your data and mental wellbeing.