Are you going to explain what UGC means?

"User-generated content". Posts, comments, uploaded files, etc.

…why would they do that? Why would they introduce something new just to turn around and try to prevent you from using it?

Why would they try to prevent users from migrating away from their service? Are you seriously asking this?

The reason they’re federating is because of the Digital Markets Act. Same reason WhatsApp is going to interoperate.

LOL they only need us to comply with regulations.

You have asserted this in multiple comments, but the only site I can find asserting this link is a blog post by someone who admits to having only a "surface-level understanding" of DMA, and thinks that this is gaining them data portability.

As someone who works at a very large company that is also affected by DMA, this is not how any company whose legal teams we've spoken with are interpreting this requirement. Data portability is being solved with export standards, so that users can (more) easily migrate to other services. Streaming someone's data over to another platform where they may or may not have an account, or ever intend to go, wouldn't fulfill that requirement, because if the user wishes to move to a non-federated instance, that would not be possible. Portability also cannot be 'favored' under DMA.

That is a separate issue from interoperability, which only works if Threads is allowing federated instances to fully interact with their users' posts, with no loss of functionality, which was at least originally not the plan.