It works a little differently to that. When someone posts on server B, that post and it's comments get blasted out to all subscribed servers. So server A will already have the post cached if someone is subscribed to that community. The cache in server A will update any time activity happens on server B.

It's eternal yes, unless the admin manually purges it.

I also said cache for the sake of simplicity, it's technically not a cache. Every instance gets activity pushed to them pretty much in realtime, and stores a copy of everything. Posts, comments, votes, even moderation actions. So it's more like a massively distributed multi-primary eventually-maybe-consistent database than a cache.

Apart from the initial preview that fetches the last 20 posts and no comments, everything is populated purely through ActivityPub messages being pushed to every subscribed instance, in mostly realtime.

So user 1&2 never request A to go get a post from B. They simply request a post that's already on A that's a copy that's been pushed by B and may have been published by C. B is only involved if a user from A comments on the post, then A will push that comment to B which will then push it to C and D and others.

So 10,000 users viewing a post on A is entirely handled by A, and 20,000 users on C viewing the same post is entirely handled by C. B could have zero users and it would still work perfectly. Similarly, A could have zero communities and rely entirely on B to manage the communities. B would have very little work to do despite having a total of 30,000 users viewing its posts. In fact, B could even go down and A and C would still serve the post and even take comments and votes, they just will be synchronized back when B comes back up and A&C would temporarily have a slightly different view of the same post.

So the more instances, the more distributed everything is. And that's why instances that becomes too large can simply shut down registrations or even kick its users out. It could become B in this example.