I think this works much better for social media than it would for an encyclopedia - while a Mastodon user I'm interested in is likely on a single instance, a topic an encyclopedia would cover might be present on many instances, each hosting a different version. I don't think it's feasible to expect users to read every single one.
That would only be likely to happen when communities identify by their bias (see: "conservapedia.") Existing wiki communities tend to divide based on topic, without a lot of overlap. (See: fandom). A federated alternative to fandom.com is what I would imagine when someone says "federated wiki."
