You are 100% able to sue, but, in the US, the result of that suit is 99.9% that you will be held to that arbitration clause anyways, with an arbitrator of Meta's choosing.
Arbitration clauses are very strong in the United States and have been getting stronger for years. Across both Democratic and Republican administrations, in state and federal courts, judges constantly reaffirm that these provisions are binding. Even literal shrinkwrap arbitration clauses on foods (Vital Proteins, Daily Harvest), etc. are upheld.
Exceptions are rare, such as unborn babies getting sick who never signed a clause such as with Daily Harvest, or when a case is public enough to draw backlash such as with the Disney+ trial arbitration clause being used to prevent a man whose wife died at a DisneyWorld restaurant from suing. Even parents suing on behalf of their pre-teenage children (e.g. against Snapchat in an Illinois court) find themselves blocked by arbitration.
There is no way merely having someones Instagram hacked and having "their username stolen" (not something possible, it's Meta's property) will make for such a rare scneario.
Per Instagram's ToS, if you sued instead of filing a Notice of Dispute (i.e. arbitration), you would be forfeiting the provision where Meta pays for your arbitration and other fees for claims less than $75,000. You would also be risking a decision from the arbitrator (AAA, who you should expect to be biased to favor Meta) that you would also need to pay Meta's legal fees.
If you try to sue, your lawyer will tell you all this.
Not expecting to win a dime from Meta, your lawyer would only represent you if you have pockets deep enough to fight a losing fight.