Interesting concept, it would be nice to provide instructions for instance admins.

Also, I would suggest adding tags, that way instance admins can select specific tags if they want to. It would help create a better local feed for new instances.

I think mods (including me) wouldn't to put effort into a new community if it doesn't get any interaction, so I think it would be nice to at least start with it appearing in the "All" tab.

This is a very good usecase for a problem I hadn't even thought of.