It totally can. It's just not a feature at the moment. There's many federation restrictions that can exist but currently Lemmy only knows of like, ~3.
- Open to everyone and everything
- So everything is allowed, full-on communication
- Open to everyone and everything but with a blacklist
- So everything is allowed, full-on communication however blocklisted Community B becomes "dead" and can't interact with Community A.
- Allowlisted community
- You can only interact between allowlisted communties however when you go to Community B (allowlisted), you could see and interact with people from Community C (which is not allowlisted!) when in a Community of B but not of A. However, people from A cannot see or interact with communities of C and vice-versa.