Threads is also testing federation, it supposedly is close to being enabled.
Interesting dynamic is that Mastodon's community is such a sour bunch that likely most instance owners will block federation with Threads at the domain level. Because "Meta evil".
This takes away choice at the user level. Normal people that just want to connect with people and content no matter where it is hosted, which is the very purpose of ActivityPub, have no choice but to move to instances that do federate.
...which will be the large instances, like mastodon.social. It's already the default instance and by far the largest. For maximum connectivity and the biggest chance that it doesn't go under, it is the primary choice for most users. So this dynamic of too much instance-level moderation effectively undermines the idea of the fediverse. There will always be tiny for-purpose instances, but the idea that many small instances will grow the fediverse to Big Tech scale is invalidated.
Come to think of it, one might as well create a Threads account. It's a community almost a 100 times larger than all of Mastodon combined. So if you just want to connect to people and find content, Mastodon offers few tangible benefits to normies.