and then it will reach out to other instances to grab content from every external community that at least one local user has subscribed to
It’s the other way around. The local user subscribes to the community on the remote instance, which causes the remote instance to then push you every action that occurs on that community as it happens. The pull method is only used once and doesn’t bring in comments, it’s meant as a preview for when a remote community is used for the first time.
And this is why their content won’t make it to your instance: it expects the other instance to send it to you, but they’re refusing to. Similarly, they won’t accept content from your instance, even though it’s trying to.
Local and remote communities are pretty similar internally, federation happens as a separate process in a queue system.
This leads to this:
you can still subscribe to subs on defederated instances, it’s just the interactions that don’t get passed back and forth.