I think the benefits of federation is discoverability. I can spin up my gitea or forgejo (or something else!) Instance, but when people look for code in their instances, they can still discover my public repositories, and if they want to contribute, they can fork and open PRs from their instances.

So yeah, it means mostly you can selfhost and provide space to others, but with the same benefits that right now github offers (I.e., everything is there).