I really don’t understand the benefit of being federated

The benefit is to prevent this from being the next Reddit. Being a nonprofit doesn't really guarantee anything in the long term. OpenAI was a non profit and now it isn't... Rather than trust a single entity to not abuse its power, federation aims to not give any entity all the power to begin with.

It also solves practical problems. Which single benign entity would pay for the servers and internet connections to become the new reddit? I don't think there is one.