There is no rule that everything about Germany is hosted on feddit.de and everything what is hosted on feddit.de is about Germany. I have a english language GalaxyWatch community located on feddit.de.
TBH, I do not know what is the best way to handle these. As far as I understand, the idea of fediverse is that instance as such must not be important. And there are many instances which have no “self-vision” or it is based on other logic than geography.
Or may be they should be in a “sport instance”, so people who are not interested in sport can block whole sport instance? This makes a lot of sense for people who are not interested in given topic (for example sport, politics, cats, anime) - whatever geography or language is.
I see what where you can from, but I do not think that instance blocking and a strong geographical separation is a good solution. This, btw, will also enforce “US by default” pattern even stronger.