etrotta

It is not “in the whole fediverse”, it is out of approximately 325,000 posts analyzed over a two day period.
And that is just for known images that matched the hash.

Quoting the entire paragraph:

Out of approximately 325,000 posts analyzed over a two day period, we detected
112 instances of known CSAM, as well as 554 instances of content identified as
sexually explicit with highest confidence by Google SafeSearch in posts that also
matched hashtags or keywords commonly used by child exploitation communities.
We also found 713 uses of the top 20 CSAM-related hashtags on the Fediverse
on posts containing media, as well as 1,217 posts containing no media (the text
content of which primarily related to off-site CSAM trading or grooming of minors).
From post metadata, we observed the presence of emerging content categories
including Computer-Generated CSAM (CG-CSAM) as well as Self-Generated CSAM
(SG-CSAM).

Here’s a link to the report: https://stacks.stanford.edu/file/druid:vb515nd6874/20230724-fediverse-csam-report.pdf
It is from 2023-07-24, so there’s a considerable chance it is not the one you were thinking about?

They could live in the Southern hemisphere Subtropics like somewhere in Latin America

Their arguments still hold up pretty well as far as I can tell. If anything “improved” since then, you could argue that what the biggest platforms decided to use (Mastodon, Lemmy) became the de-facto dialect in use, but you still have to explicitly refer to how certain projects do things if you want to implement ActivityPub, which can be pretty demotivating for developers, and doesn’t makes the user experience any better.

…and nothing prevents new apps such as Threads from using ActivityPub differently, being incompatible with existing apps and further dividing the space

If by algorithms you mean things like GPT, all data on the fediverse is effectively public and arguably even easier to be collected than the likes of reddit, and is almost definitely going to be used to train models whenever or not the fediverse federates with threads.
There’s still significance in defederating though, specially when it comes to preventing “Embrace, extend, and extinguish”