I don't see how it solves the mentioned issues. Instead, federation introduces new issues of complexity, multi-layered moderation, and potential for distributed inefficiency, confusion, or more malicious attacks.
I think we can see on Lemmy some of the problems it introduces. But for an Encyclopedia, which is supposed to be a source of truth, I think it's much worse.
If you depend on instance admins as curators, it's not that different from Wikipedia roles, which at least has open governance and elections.
They say other projects didn't reach critical mass. I don't think spreading your contributors thin - even while connecting them to some dynamic degree - is how you reach critical mass.