If you're on such a large instance you benefit from the connections other users on your instance have made; you "see" the connections made by others in your Local/Home/Federated timelines, in conversations, in profiles, etc.
But with small instances this is trickier… we don't have thousands of users making tens of thousands of connections with other instances. That's why we, with only 25 users (as of this post), are only currently "connected" to 2728 of .social's 289,603 accounts. 3/7