What are instances? Are they servers?

Yes, each instance hosts differents communities, like lemmy.world and lemmy.ml, but through federation they are able to communicate between each other. For their respective users, that means to be able to read, comment, post and vote in every community inside their instances.

But somehow there is drama going on between something called beehaw and lemmy.world?

Not really dramatic, lemmy.world and sh.itjust.works have a simple registration process, which means it can be very easy to sign up bots, beehaw prefers a more rigid sign up process, where they can better curate their community.

What or who is being defederated?

Beehaw defederated from lemmy.world and sh.itjust.works until all of them have better mod tools to deal with the sudden influx of users. Defederated means that users between them can't read new comments and posts, and vote in the other community, leaving only the post and comment copies that existed before the defederation.

Somehow I just joined but I'm shadowbanned cuz I registered on lemmy.world?

Servers were overloaded, the usual growing pains in a new plataform.

The text box bugs out and trying to type in a new line jumps to some random point in the previous line in Jerboa? Kinda wonky

I recommend Liftoff and wefwef instead. Jerboa is the Lemmy's creators side project, so it isn't their primary focus. wefwef is a progressive web app (PWA) so you might not find it the play/app store.