“All” picks up any communities your instance knows about, whether you personally are subscribed or not. My understanding is that once one person from your instance subscribes to something it starts federating, but unless someone does that it stays separate.
While I agree being able to search for communities needs a little help if it’s a brand new community outside of your home instance to make it less confusing, it makes sense from the standpoint of having to tell the community to talk to an external instance by having someone from the external instance subscribe.
There are some funky federation issues right now, the servers are straining a little bit under the load spike. I can see your post.