You said that as a lemmy.ml user in reply to a user from another instance, and I'm replying to you from yet a third. It doesn't seem to be restricting any of us to our own instance

Is the "problem" you're talking about that any instance may have it's own community by the same name as another instance's? That's not a bug.

That lets anyone say "I don't like that community for this thing I like, I shall set up my own on this other instance"